creation of farmer organizations, and regulatory oversight, as well as farmers' investment in joint facilities, wells, and on-farm water storage and irrigation equipment. The appropriate focus for both policy and investment will depend on both the scale and type of irrigation, and the structure of national economies (Faure? s et al., 2007)

Develop locally relevant groundwater management strategies that support aquifer recharge and manage demand.A large body of evidence from Asia suggests that groundwater irrigation promotes greater interpersonal, intergender, interclass, and spatial equity than do large irrigation projects. Evidence from Africa, Asia, and Latin America also suggests that groundwater is important in settings where poor farmers find opportunities to improve their livelihoods through small-scale farming based on shallow groundwater circulation. However, pumping costs are rising, and irrigationsupporting subsidies are compromising the viability of rural energy providers. India is a prime example. Moreover, the impacts of groundwater depletion on water quality, stream flows, wetlands, and down-gradient users in certain pockets are rapidly threatening to undermine the benefits. In arid regions, where fossil groundwater is a primary source of water for all uses, intensive groundwater irrigation may threaten future water security. In addition, with anticipated shifts in precipitation patterns induced by climate change, groundwater's value as strategic reserve is set to increase worldwide (Shah et al., 2007). Because groundwater use and dependency will continue to grow in many parts of the developing world, participatory approaches to sustainable groundwater management will need to combine supplyside measures, such as artificial recharge, aquifer recovery, interbasin transfer of water and the like, with demand-side measures, such as groundwater pricing, legal and regulatory control, water rights and withdrawal permits and promotion of water-saving crops and technologies (Shah et al., 2007).

Establish and strengthen the authority of agencies administrating large water systems that cross traditional administrative boundaries.The state has historically played a leading role in water development, both in supporting large-scale irrigation, hydropower, and flood control as well as facilitating private and small-scale farmer managed irrigation (Merrey et al., 2007). There are good reasons for the state's central role in regulating and managing this vital public good resource. While the state remains the main actor to initiate reforms, these reforms are needed at all jurisdictional levels, from local to national level, and even at regional level. A recent trend has been to promote river basin organizations to manage competition for water at the basin level. There is general agreement on the long-term benefits of effective integrated management of river basins, especially with increasing competition and environmental degradation. But attempts to impose particular models of river basin organizations in developing countries, especially models derived from the experiences of rich countries, are not likely to succeed because the objectives and institutional contexts differ so greatly (Shah et al., 2005). An externally imposed one-size-fits-all strategy for managing such complexity is unlikely to be effective. Numerous models for institutional

arrangement for basin water governance exist, and their effectiveness will depend on local basin and national conditions (Molle et al., 2007).

Better integration of water use between agricultural and industrial users. Water use by agriculture could limit the amount available for other uses when water becomes scarce, however usually the opposite is true. Higher value uses (e.g., domestic purposes and industries in urban areas) have precedence; hence agriculture must adapt to reduced allocations. Uses with lower priority than agriculture are aquatic ecosystems and the environment (CA, 2007). Industrial and domestic use can also affect agriculture through the discharge of untreated wastewater from urban areas into surface-water system, decreasing the quality of water used in irrigation. Intersectoral water allocation is to a large extent a product of broader political and economic considerations, such as the political clout of urban areas and industrial interests (see Molle and Berkoff, 2005). Negotiating and crafting new types of organizational arrangements for managing irrigation, therefore, are not possible without considering broader institutional arrangements and policies in the water, agricultural, and rural sectors as well as currency, trade, and overall macroeconomic policies (Merrey et al., 2007).

Water markets to better allocate water amongst uses and users. Water markets are playing an increasingly important role in the developed world in allocating water on a regional basis. There are examples in which government has used markets or market-like arrangements to resolve vexing problems of allocation. Water pricing is one market vehicle that has received considerable attention. The difficulties of implementing water pricing in developing countries, however, are substantial. Pricing policies for full cost recovery of infrastructure development and operation and maintenance, for example, risk seriously aggravating water deprivation and poverty (Dinar, 2000; Molle and Berkoff, 2007). A sliding-scale pricing strategy is one possible solution (Schreiner and van Koppen, 2001). Another water market reform mechanism is tradable water rights, which represents the greatest degree of privatization in water management. In addition to clearly defined water rights (including transfer rights), water markets require physical infrastructure that allows water to be transferred, and institutional arrangements to protect against negative impact on third parties (Easter et al., 1998). Earlier enthusiasm for market-based water reforms was at best premature (Merrey et al., 2007). The conditions necessary for market-based reforms to contribute to sustainable water management in agriculture are extremely rare in developing countries and uncommon even in rich countries. The Chile and Valencia (Spain) water market reforms have been held up as examples, but closer inspection raises many questions (Bauer, 1997, 2005; Ingo, 2004; Trawick, 2005). As in all market and private property rights situations, questions of regulation (who sets the rules and what are the rules?) and capture of benefits (who wins and who loses in imperfect markets?) are central for assessing market-inspired reforms. A phased approach of vesting rights in existing users and currently excluded users and of clarifying regulatory mechanisms before developing