Introduction of Irrigation Service Fee (ISF) in Indonesia: Institutional development in action for resources management

Abstract

The inability to properly maintain irrigation systems over time forced the Government of Indonesia (GOI) to seek cost recovery from water users through introduction of an irrigation service fee. The plan is to introduce this fee in all of the technical irrigation systems of Indonesia, covering about 4 million hectares, over a 12 year period. Design and Introduction of this service fee in 4 pilot areas of the 4 major rice producing provinces (West, Central and East Java, and South Sulawesi) during 1989–1991 has shown that users are willing to pay. Results of first ISF collection from over 11,000 farmers in Central and East Java in pilot systems was an encouraging 95%. However that acceptance to pay by users depends on their structured and systematic involvement in defining systems needs. They need to understand a differentiation in payment if service levels are different. They appreciate use of collected funds in the system where collected. They understand the organization of water users associations but this requires their active role in fee determination and collection. They understand the establishment of federations of these associations. ISF requires also active involvement of Local Government officials as facilitators and intermediaries between service receivers (the water users) and service providers (personnel of the Public Works irrigation department) in the introduction period. This article describes the experience of the first 21 months of the ISF project, the concept developed, the principles used as basis for ISF, the introduction at the field level, issues related to acceptance by users and by the institutions involved, and the first results.