Past and current trends in agricultural areas under irrigation

Agriculture in Peru dates back more than 5,000 years, when the Chavín culture built simple irrigation systems and canal networks north of Lima. In the 2nd centuries, the Inca Empire boasted an advanced irrigation system, which supplied water to 700,000 hectares of various crops in the fertile coastal area. Over the next 300 years, Spanish colonizers modified the country's approach to mining, resulting in a reduction in agricultural production to 300,000 hectares and the stagnation of irrigation infrastructure development.[7]​.

The century represented a period of agricultural stagnation, especially during the 1970s and 1980s. Over the past 30 years, the Peruvian government has invested approximately US$5 billion to improve hydraulic infrastructure, including dams and irrigation and drainage systems, resulting in an increase in irrigated territory, primarily in the coastal region.

Currently, approximately 1.7 million ha of Peru's total 2.6 million cultivated ha have some irrigation infrastructure available. However, only 1.2 million ha are actually irrigated each year due to the poor performance of irrigation systems.[7]​.

Institutional development

The century began with an important institutional development in the irrigation sector of Peru with the creation of the Corps of Mining and Water Engineers (1904) and the Hydrological Service (1911). In 1914, the Peruvian government hired American engineer Charles Shutton to advise on public works for irrigation development.[8] However, it was not until the 1920s that the first large-scale state irrigation projects were launched. Public investment in irrigation in 1905 corresponded to 8.7% of the total, reaching 18.62% in 1912, a trend that continued in the decades of the 20s and 30s.

From 1945 to 1948, the Government approved the National Irrigation and Irrigation Improvement Plan. Between 1945 and 1956, public investment reached unprecedented levels with up to 50% of total investment. The transfers of water from the Quinoz River to the intermittent Piura River in the Department of Piura and from the Chotano River to the Chancay-Lambayeque River in the Department of Lambayeque, both located in the northern part of the coastal plain, are examples of the projects implemented at that time and during the decade of the 1960s.[7] Between 1950 and 1980, 90% of the investment in irrigation was directed to the coastal region and only the 10% to the Altiplano.

The 1969 land reform expropriated all properties above a certain size, generally 100 ha. The majority of Peruvian peasants were independent smallholders and, therefore, continued to work their lands individually after the reforms.[8]​ Agrarian reform and political instability contributed to poor agricultural performance, as they profoundly changed production relations in the countryside, disrupted the organization of productive systems on the best agricultural lands, and strained some entrepreneurial capacity.[9]​.

The informal associations of Peruvian irrigators were affected by the agrarian reform and the General Water Law since they promoted a certain model of associations and gave them official status. In 1989, the Government approved Supreme Decree 037-89-AG, transferring the responsibilities for the operation and maintenance of irrigation systems to user boards. This decentralization, which occurred especially on the coast, was intended to decouple the state, encourage private investment, and stimulate the independence and financial sustainability of user boards through the establishment of water rates. However, low rates and little collection capacity produced insufficient financial support for user boards to maintain and develop irrigation systems. The Peruvian government remained the largest player in irrigation development, which was concentrated in the coastal region. 76% of the investment in the coastal region between 1978 and 1982 was concentrated in the three most important irrigation projects in Majes (Arequipa Region), Chira-Piura (Piura Region) and Tinajones (Lambayeque Department). This trend continued during the 90s.[10]​.

In 1996, the Government, with the support of the World Bank, created the Irrigation Subsector Program (PSI), which successfully developed the capacities of user boards on the coast, reduced the importance of public investment in the sector, improved the financial sustainability of the boards and increased private investment in the technical improvement of irrigation systems.[11]​.

Legal framework

Peru's constitutional framework establishes that water resources are the exclusive property and administrative responsibility of the national government. The government allows the use of water under special conditions and after the corresponding payment of a fee, although it maintains full ownership and control.[4]​.

The General Water Law 17752 of 1969 considers water as a basic agricultural product and, therefore, does not recognize other uses of water.[1]​.

In 2003, the Government approved the National Irrigation Strategy, Ministerial Resolution Nº0498-2003-AG, which aims to improve the profitability and competitiveness of irrigated agriculture (See National Strategy below). Likewise, the Technological Irrigation Program (PRT, Law No. 28585 and its Regulation DS 004-2006-AG), approved in 2006, aims to repair, develop and improve irrigation systems throughout Peru.

A National Strategy for Water Resources Management bill, currently under review by the Agricultural Commission, will recognize the multi-sectoral nature of water and modify the previous institutional and legal framework, including irrigation, to carry out integrated water resources management.

Institutional framework

The institutional reforms of the last decade reduced the technical tasks that were the responsibility of the Ministry of Agriculture (Ministerio de Agricultura MINAG) and created numerous semi-autonomous executive units and special programs at the national, regional and local levels. In 2008, the Peruvian government created the National Water Authority, an agency attached to MINAG, replacing the Water Resources Administration, which was previously under the control of INRENA (National Institute of Natural Resources INRENA). The National Water Authority (ANA) is responsible for the design and implementation at the national level of policies on sustainable water resources and irrigation.[12]​ Please note that currently the ANA does not have representation at the local level.

The PSI (Irrigation Subsector Program Project), under the control of INRENA, aims to improve the management and technical capacities of the water user boards. The National Program for Watershed Management and Soil Conservation (PRONAMACHCS), run by INRENA, promotes the integrated management of water resources and the conservation of river basins, with emphasis on the highlands. The National Institute of Agrarian Research studies innovative and low-cost technologies to improve the management of water resources and irrigation. The National Service of Meteorology and Hydrology studies and disseminates information about climatic events and their impact on water resources.[7]​ The Technical Irrigation Administration (ATDR), under the control of INRENA, aims to promote the sustainable use of water and resolve conflicts in the area of ​​irrigation districts.

The national government continues to transfer duties to regional and local governments, especially after the Decentralization Law and the 2003 law establishing regional governments. One of the most recent responsibilities of these bodies consists of the execution of the Technical Irrigation Program. Finally, four river basin agencies (Jequetepeque, Chira-Piura-Chancay-Lambayeque, Chillón-Rimac-Lurín and Santa) complete the organizations involved in the management of water resources. This proliferation of actors with different areas of jurisdiction (regions, irrigation districts and river basins) adds to the complexity of water resources management at the local and national levels.

Farmers/organizations and on-farm water management

In 1989, the Peruvian government approved the Decree of the Water User Boards (DS 037-89-AG) and transferred irrigation management to these newly created boards. The majority (90%) of the irrigation infrastructure in coastal areas is managed by 64 water user boards and covers nearly 300,000 water users.[13] The boards are less numerous in the Andes and in the Amazon, where more traditional organizations, the Irrigation Committees, are responsible for irrigation.

Water user boards are private, nonprofit, collectively owned organizations responsible for the operation and maintenance of collective irrigation infrastructure and the administration of water rates in a particular irrigation district.[14]​.

The water user boards are composed of irrigation commissions and non-agricultural user groups, which are responsible for the distribution of water in their irrigation subsectors and must participate financially in the planning and maintenance of the collective irrigation infrastructure. The boards elect a board of directors to manage financial resources and execute the agreements and provisions of the water users board.

Water user boards face several challenges: (i) increasing pressure on water resources due to competing demands, (ii) deteriorating irrigation infrastructure, (iii) lack of financial sustainability, (iv) lack of technical capacity for irrigation management, and (v) the ambiguous role of boards, commissions and committees with each other and with the Government.

In 2003, the Peruvian government approved Ministerial Resolution No. 0498-2003-AG on National Irrigation Policy and Strategy in Peru. The strategy was prepared by the multisectoral technical commission, formed by representatives of the ministries of Agriculture, Housing, Construction and Sanitation, Economy and Finance, and the National Association of Irrigation Users.[15]​.

The Strategy seeks to increase the profitability and competitiveness of irrigated agriculture, through the sustainable use of land and the efficient use of water.[15]​ One of the main objectives of this strategy is to clarify institutional roles and responsibilities, including the creation of a National Water Authority (recently created), in addition to the establishment of a network for river basin authorities and regional and municipal governments to collaborate on water management.

The strategy also aims to increase water use efficiency through the rehabilitation and modernization of irrigation infrastructure and the improvement of its operation and maintenance; promote the equitable and sustainable use of water through the technical improvement of irrigation and drainage infrastructure; develop irrigation user boards that are technically and financially independent and responsible for the operation and maintenance of irrigation infrastructure; and increase farmers' investment in irrigation infrastructure by regularizing water rights, taking into account water availability and efficient water use.

Water user boards are in charge of collecting water rates. Only 50% of boards are financially and technically independent. The rest are in process or need help to achieve financial and technical sustainability. Rates fluctuate between US$20-30 per ha and collection rates vary between 10% in the Amazon and 68% in the coastal region.[16]​.

The majority of fee income (83%) finances the activities of irrigation user boards. The remaining returns are intended to cover operation and maintenance expenses (8%) and to support the regional water authority, ATDR (8%). (FONAGUA).[17]​ FONAGUA, a multi-sector body, aims to promote the integrated management of water use in Peru.[18]​.

According to MINAG, the cost of minor and major irrigation infrastructure in Peru is 11% and 48%, respectively, higher than the world average. Decentralization, together with the development of water resources and irrigation management institutions, created numerous entities responsible for irrigation investments at the national, regional and local levels. The national government has been investing in major irrigation infrastructure, located mainly in the coastal region, although it plans to expand its efforts to the Altiplano as well. According to data from 2000, the national government invested US$3,468 million to develop irrigation schemes in ten coastal projects.

Minor irrigation infrastructure is financed by the national government in collaboration with beneficiaries through a cost-sharing system. Since the creation of the Technified Irrigation Program (under the control of PSI), financially sustainable water user boards have improved 5,282 ha of irrigation infrastructure, benefiting 1,085 producers, raising US$5.5 million of a US$13.6 million project.[11]​ NGOs, municipal savings and credit banks, and savings and credit cooperatives operating in almost all departments of the country are also providing products designed specifically to serve agricultural producers in Peru, including loans to improve agricultural microenterprises and irrigation infrastructure.[1]​.

The effects of climate change in Peru can be seen in the most extreme atmospheric conditions such as droughts and floods, El Niño Southern Oscillation,[4]​ and the retreat of Andean glaciers.[19]​ The combined impacts of global warming and extreme weather are likely to severely affect hydrology, decreasing the flow of water available for irrigation downstream in the coastal region and altering crop productivity. The Andean Community (CAN) estimates that climate change will cause losses worth US$30 billion or 4.5% of annual GDP starting in 2025.[20]​.

El Niño hits Peru approximately every seven years, causing economic and environmental damage and loss of life. In 1997-1998, El Niño caused US$2 billion in damages. Climate change is increasing the severity of this and other storms, increasing the vulnerability of Peru's poor and damaging low-tech irrigation infrastructure and agricultural crops. In the mountains, deforestation and slash-and-burn agriculture increase erosion and the risk of landslides. These effects are felt at its source and downstream and include damage to crops, water resources and irrigation.

Peru contains approximately 71% of the world's tropical glaciers. Some of Peru's perennial rivers are fed by glaciers that are rapidly disappearing due to climate change. Since 1980, Peruvian glaciers have lost 22% of their surface (500 km²), the equivalent of 7 billion cubic meters of water (about ten years of water supply for Lima). The retreat of the Andes glaciers has important repercussions on Peru's water resources, including irrigation production and hydroelectric generation. This trend will continue, and increased runoff is believed to cause severe water stress in Peru over the next 20 years. Peru's water supply is predicted to decline radically between 2030 and 2050.[3]​ (See Impacts of Glacier Retreat in the Andes:Documentary).

In 1997, the World Bank contributed US$85 million, out of a total of US$172.4 million, to the Irrigation Subsector Project. The objectives of the PSI were (i) to increase the efficient use of water through the rehabilitation and modernization of irrigation infrastructure, (ii) the institutional strengthening of water user boards and (iii) to modernize technical irrigation systems. In 2005, the World Bank increased its participation in PSI II, investing US$10.26 million of a US$22 million project aimed at improving irrigation systems on the coast. In 2007, the World Bank approved PSI III, thus expanding technical and financial aid to the mountains.

In June 2007, the Inter-American Development Bank (IDB) approved US$200 million for a water resources reform program (PRRH) that would include irrigation structures and institutional and legal reforms. In August 2007, the IDB approved an additional US$5 million to support the capacity development efforts contained in the PRRH. The IDB is also implementing a water resources management plan for the Peruvian Maschón and Chonta river basins. The objective of this US$1.2 million grant is to define appropriate measures to improve integrated water resources management.

The PSI (Irrigation Subsector Project) is yielding positive results on the coast, combining financial assistance and capacity building with the regularization of water rights. The model is extending to the mountains.

The government and water user boards share responsibilities in investing in irrigation infrastructure improvements through a cost-sharing system. The cost-sharing system encourages water user boards to increase tariffs and collection rates to raise the percentage of the total investment (15% for large investments and 35% for farm investments) which would allow the government to finance the rest of the project. Since its implementation, 63,730 producers belonging to 19 water user boards have improved the irrigation infrastructure of 197,150 hectares along the coast, contributing 14% of the total investment. The water user boards have also technically improved 5,282 ha of irrigation infrastructure on land, benefiting 1,085 producers by raising US$5.5 million of the US$13.6 million.[11]​.

The rehabilitation and modernization of infrastructure is complemented by the improvement of the management of irrigation schemes to ensure the effective and sustainable use of irrigation systems. The capacity development aspect of the Peruvian model includes strengthening systems operation and maintenance requirements and improving financial performance through increased volumetric metering, fee structure and collection rates. The improvement in the financial performance of water user boards is linked to increasing agricultural incomes and, therefore, the ability of farmers to contribute to operation and maintenance expenses, as well as investments in irrigation improvement.

Furthermore, MINAG began a Special Project on Land Titling and Rural Cadastre (PETTCR) in 1992 to combat uncertainty over property rights and the atomization of the agrarian structure. The implementation of the PETTCR has increased the number of registered agricultural lands from 7% to 81% in 2005.[11]​ The PETTCR includes aggressive regularization of water rights based on water availability. The water security provided by formalized water rights is likely to encourage farmers to invest in their agricultural systems: for example, in improved on-farm irrigation technologies or in conversion to higher-value crops.

Past and current trends in agricultural areas under irrigation

Agriculture in Peru dates back more than 5,000 years, when the Chavín culture built simple irrigation systems and canal networks north of Lima. In the 2nd centuries, the Inca Empire boasted an advanced irrigation system, which supplied water to 700,000 hectares of various crops in the fertile coastal area. Over the next 300 years, Spanish colonizers modified the country's approach to mining, resulting in a reduction in agricultural production to 300,000 hectares and the stagnation of irrigation infrastructure development.[7]​.

The century represented a period of agricultural stagnation, especially during the 1970s and 1980s. Over the past 30 years, the Peruvian government has invested approximately US$5 billion to improve hydraulic infrastructure, including dams and irrigation and drainage systems, resulting in an increase in irrigated territory, primarily in the coastal region.

Currently, approximately 1.7 million ha of Peru's total 2.6 million cultivated ha have some irrigation infrastructure available. However, only 1.2 million ha are actually irrigated each year due to the poor performance of irrigation systems.[7]​.

Institutional development

The century began with an important institutional development in the irrigation sector of Peru with the creation of the Corps of Mining and Water Engineers (1904) and the Hydrological Service (1911). In 1914, the Peruvian government hired American engineer Charles Shutton to advise on public works for irrigation development.[8] However, it was not until the 1920s that the first large-scale state irrigation projects were launched. Public investment in irrigation in 1905 corresponded to 8.7% of the total, reaching 18.62% in 1912, a trend that continued in the decades of the 20s and 30s.

From 1945 to 1948, the Government approved the National Irrigation and Irrigation Improvement Plan. Between 1945 and 1956, public investment reached unprecedented levels with up to 50% of total investment. The transfers of water from the Quinoz River to the intermittent Piura River in the Department of Piura and from the Chotano River to the Chancay-Lambayeque River in the Department of Lambayeque, both located in the northern part of the coastal plain, are examples of the projects implemented at that time and during the decade of the 1960s.[7] Between 1950 and 1980, 90% of the investment in irrigation was directed to the coastal region and only the 10% to the Altiplano.

The 1969 land reform expropriated all properties above a certain size, generally 100 ha. The majority of Peruvian peasants were independent smallholders and, therefore, continued to work their lands individually after the reforms.[8]​ Agrarian reform and political instability contributed to poor agricultural performance, as they profoundly changed production relations in the countryside, disrupted the organization of productive systems on the best agricultural lands, and strained some entrepreneurial capacity.[9]​.

The informal associations of Peruvian irrigators were affected by the agrarian reform and the General Water Law since they promoted a certain model of associations and gave them official status. In 1989, the Government approved Supreme Decree 037-89-AG, transferring the responsibilities for the operation and maintenance of irrigation systems to user boards. This decentralization, which occurred especially on the coast, was intended to decouple the state, encourage private investment, and stimulate the independence and financial sustainability of user boards through the establishment of water rates. However, low rates and little collection capacity produced insufficient financial support for user boards to maintain and develop irrigation systems. The Peruvian government remained the largest player in irrigation development, which was concentrated in the coastal region. 76% of the investment in the coastal region between 1978 and 1982 was concentrated in the three most important irrigation projects in Majes (Arequipa Region), Chira-Piura (Piura Region) and Tinajones (Lambayeque Department). This trend continued during the 90s.[10]​.

In 1996, the Government, with the support of the World Bank, created the Irrigation Subsector Program (PSI), which successfully developed the capacities of user boards on the coast, reduced the importance of public investment in the sector, improved the financial sustainability of the boards and increased private investment in the technical improvement of irrigation systems.[11]​.

Legal framework

Peru's constitutional framework establishes that water resources are the exclusive property and administrative responsibility of the national government. The government allows the use of water under special conditions and after the corresponding payment of a fee, although it maintains full ownership and control.[4]​.

The General Water Law 17752 of 1969 considers water as a basic agricultural product and, therefore, does not recognize other uses of water.[1]​.

In 2003, the Government approved the National Irrigation Strategy, Ministerial Resolution Nº0498-2003-AG, which aims to improve the profitability and competitiveness of irrigated agriculture (See National Strategy below). Likewise, the Technological Irrigation Program (PRT, Law No. 28585 and its Regulation DS 004-2006-AG), approved in 2006, aims to repair, develop and improve irrigation systems throughout Peru.

A National Strategy for Water Resources Management bill, currently under review by the Agricultural Commission, will recognize the multi-sectoral nature of water and modify the previous institutional and legal framework, including irrigation, to carry out integrated water resources management.

Institutional framework

The institutional reforms of the last decade reduced the technical tasks that were the responsibility of the Ministry of Agriculture (Ministerio de Agricultura MINAG) and created numerous semi-autonomous executive units and special programs at the national, regional and local levels. In 2008, the Peruvian government created the National Water Authority, an agency attached to MINAG, replacing the Water Resources Administration, which was previously under the control of INRENA (National Institute of Natural Resources INRENA). The National Water Authority (ANA) is responsible for the design and implementation at the national level of policies on sustainable water resources and irrigation.[12]​ Please note that currently the ANA does not have representation at the local level.

The PSI (Irrigation Subsector Program Project), under the control of INRENA, aims to improve the management and technical capacities of the water user boards. The National Program for Watershed Management and Soil Conservation (PRONAMACHCS), run by INRENA, promotes the integrated management of water resources and the conservation of river basins, with emphasis on the highlands. The National Institute of Agrarian Research studies innovative and low-cost technologies to improve the management of water resources and irrigation. The National Service of Meteorology and Hydrology studies and disseminates information about climatic events and their impact on water resources.[7]​ The Technical Irrigation Administration (ATDR), under the control of INRENA, aims to promote the sustainable use of water and resolve conflicts in the area of ​​irrigation districts.

The national government continues to transfer duties to regional and local governments, especially after the Decentralization Law and the 2003 law establishing regional governments. One of the most recent responsibilities of these bodies consists of the execution of the Technical Irrigation Program. Finally, four river basin agencies (Jequetepeque, Chira-Piura-Chancay-Lambayeque, Chillón-Rimac-Lurín and Santa) complete the organizations involved in the management of water resources. This proliferation of actors with different areas of jurisdiction (regions, irrigation districts and river basins) adds to the complexity of water resources management at the local and national levels.

Farmers/organizations and on-farm water management

In 1989, the Peruvian government approved the Decree of the Water User Boards (DS 037-89-AG) and transferred irrigation management to these newly created boards. The majority (90%) of the irrigation infrastructure in coastal areas is managed by 64 water user boards and covers nearly 300,000 water users.[13] The boards are less numerous in the Andes and in the Amazon, where more traditional organizations, the Irrigation Committees, are responsible for irrigation.

Water user boards are private, nonprofit, collectively owned organizations responsible for the operation and maintenance of collective irrigation infrastructure and the administration of water rates in a particular irrigation district.[14]​.

The water user boards are composed of irrigation commissions and non-agricultural user groups, which are responsible for the distribution of water in their irrigation subsectors and must participate financially in the planning and maintenance of the collective irrigation infrastructure. The boards elect a board of directors to manage financial resources and execute the agreements and provisions of the water users board.

Water user boards face several challenges: (i) increasing pressure on water resources due to competing demands, (ii) deteriorating irrigation infrastructure, (iii) lack of financial sustainability, (iv) lack of technical capacity for irrigation management, and (v) the ambiguous role of boards, commissions and committees with each other and with the Government.

In 2003, the Peruvian government approved Ministerial Resolution No. 0498-2003-AG on National Irrigation Policy and Strategy in Peru. The strategy was prepared by the multisectoral technical commission, formed by representatives of the ministries of Agriculture, Housing, Construction and Sanitation, Economy and Finance, and the National Association of Irrigation Users.[15]​.

The Strategy seeks to increase the profitability and competitiveness of irrigated agriculture, through the sustainable use of land and the efficient use of water.[15]​ One of the main objectives of this strategy is to clarify institutional roles and responsibilities, including the creation of a National Water Authority (recently created), in addition to the establishment of a network for river basin authorities and regional and municipal governments to collaborate on water management.

The strategy also aims to increase water use efficiency through the rehabilitation and modernization of irrigation infrastructure and the improvement of its operation and maintenance; promote the equitable and sustainable use of water through the technical improvement of irrigation and drainage infrastructure; develop irrigation user boards that are technically and financially independent and responsible for the operation and maintenance of irrigation infrastructure; and increase farmers' investment in irrigation infrastructure by regularizing water rights, taking into account water availability and efficient water use.

Water user boards are in charge of collecting water rates. Only 50% of boards are financially and technically independent. The rest are in process or need help to achieve financial and technical sustainability. Rates fluctuate between US$20-30 per ha and collection rates vary between 10% in the Amazon and 68% in the coastal region.[16]​.

The majority of fee income (83%) finances the activities of irrigation user boards. The remaining returns are intended to cover operation and maintenance expenses (8%) and to support the regional water authority, ATDR (8%). (FONAGUA).[17]​ FONAGUA, a multi-sector body, aims to promote the integrated management of water use in Peru.[18]​.

According to MINAG, the cost of minor and major irrigation infrastructure in Peru is 11% and 48%, respectively, higher than the world average. Decentralization, together with the development of water resources and irrigation management institutions, created numerous entities responsible for irrigation investments at the national, regional and local levels. The national government has been investing in major irrigation infrastructure, located mainly in the coastal region, although it plans to expand its efforts to the Altiplano as well. According to data from 2000, the national government invested US$3,468 million to develop irrigation schemes in ten coastal projects.

Minor irrigation infrastructure is financed by the national government in collaboration with beneficiaries through a cost-sharing system. Since the creation of the Technified Irrigation Program (under the control of PSI), financially sustainable water user boards have improved 5,282 ha of irrigation infrastructure, benefiting 1,085 producers, raising US$5.5 million of a US$13.6 million project.[11]​ NGOs, municipal savings and credit banks, and savings and credit cooperatives operating in almost all departments of the country are also providing products designed specifically to serve agricultural producers in Peru, including loans to improve agricultural microenterprises and irrigation infrastructure.[1]​.

The effects of climate change in Peru can be seen in the most extreme atmospheric conditions such as droughts and floods, El Niño Southern Oscillation,[4]​ and the retreat of Andean glaciers.[19]​ The combined impacts of global warming and extreme weather are likely to severely affect hydrology, decreasing the flow of water available for irrigation downstream in the coastal region and altering crop productivity. The Andean Community (CAN) estimates that climate change will cause losses worth US$30 billion or 4.5% of annual GDP starting in 2025.[20]​.

El Niño hits Peru approximately every seven years, causing economic and environmental damage and loss of life. In 1997-1998, El Niño caused US$2 billion in damages. Climate change is increasing the severity of this and other storms, increasing the vulnerability of Peru's poor and damaging low-tech irrigation infrastructure and agricultural crops. In the mountains, deforestation and slash-and-burn agriculture increase erosion and the risk of landslides. These effects are felt at its source and downstream and include damage to crops, water resources and irrigation.

Peru contains approximately 71% of the world's tropical glaciers. Some of Peru's perennial rivers are fed by glaciers that are rapidly disappearing due to climate change. Since 1980, Peruvian glaciers have lost 22% of their surface (500 km²), the equivalent of 7 billion cubic meters of water (about ten years of water supply for Lima). The retreat of the Andes glaciers has important repercussions on Peru's water resources, including irrigation production and hydroelectric generation. This trend will continue, and increased runoff is believed to cause severe water stress in Peru over the next 20 years. Peru's water supply is predicted to decline radically between 2030 and 2050.[3]​ (See Impacts of Glacier Retreat in the Andes:Documentary).

In 1997, the World Bank contributed US$85 million, out of a total of US$172.4 million, to the Irrigation Subsector Project. The objectives of the PSI were (i) to increase the efficient use of water through the rehabilitation and modernization of irrigation infrastructure, (ii) the institutional strengthening of water user boards and (iii) to modernize technical irrigation systems. In 2005, the World Bank increased its participation in PSI II, investing US$10.26 million of a US$22 million project aimed at improving irrigation systems on the coast. In 2007, the World Bank approved PSI III, thus expanding technical and financial aid to the mountains.

In June 2007, the Inter-American Development Bank (IDB) approved US$200 million for a water resources reform program (PRRH) that would include irrigation structures and institutional and legal reforms. In August 2007, the IDB approved an additional US$5 million to support the capacity development efforts contained in the PRRH. The IDB is also implementing a water resources management plan for the Peruvian Maschón and Chonta river basins. The objective of this US$1.2 million grant is to define appropriate measures to improve integrated water resources management.

The PSI (Irrigation Subsector Project) is yielding positive results on the coast, combining financial assistance and capacity building with the regularization of water rights. The model is extending to the mountains.

The government and water user boards share responsibilities in investing in irrigation infrastructure improvements through a cost-sharing system. The cost-sharing system encourages water user boards to increase tariffs and collection rates to raise the percentage of the total investment (15% for large investments and 35% for farm investments) which would allow the government to finance the rest of the project. Since its implementation, 63,730 producers belonging to 19 water user boards have improved the irrigation infrastructure of 197,150 hectares along the coast, contributing 14% of the total investment. The water user boards have also technically improved 5,282 ha of irrigation infrastructure on land, benefiting 1,085 producers by raising US$5.5 million of the US$13.6 million.[11]​.

The rehabilitation and modernization of infrastructure is complemented by the improvement of the management of irrigation schemes to ensure the effective and sustainable use of irrigation systems. The capacity development aspect of the Peruvian model includes strengthening systems operation and maintenance requirements and improving financial performance through increased volumetric metering, fee structure and collection rates. The improvement in the financial performance of water user boards is linked to increasing agricultural incomes and, therefore, the ability of farmers to contribute to operation and maintenance expenses, as well as investments in irrigation improvement.

Furthermore, MINAG began a Special Project on Land Titling and Rural Cadastre (PETTCR) in 1992 to combat uncertainty over property rights and the atomization of the agrarian structure. The implementation of the PETTCR has increased the number of registered agricultural lands from 7% to 81% in 2005.[11]​ The PETTCR includes aggressive regularization of water rights based on water availability. The water security provided by formalized water rights is likely to encourage farmers to invest in their agricultural systems: for example, in improved on-farm irrigation technologies or in conversion to higher-value crops.