1. Assessment of the impacts of water
transfers to urban-industrial sectors on
irrigation outcomes in the Indus Basin
Y. C. Ethan Yang1, Ghazi Alam2
& Claudia Ringler3
1/U of Massachusetts, 2/Cornell U./NESPAK, 3/ IFPRI

2. Urban-industrial water use
 Urban-industrial water use in Pakistan is
currently almost entirely met by
groundwater (GW) sources
 Given the rapid increase in urban-industrial
water demand in recent years and projected
out into the future, there is a high risk that
GW tables in major cities might become
saline, requiring rural-to-urban water
transfers
 This paper assesses the implications on
agricultural production

3. Modeling- Data used (1)
 This study modified the Indus River Basin
Model Revised (IBMR) to evaluate the effect
of transferring irrigated water to domestic
and industrial (D&I) water use
 The IBMR in its most recent revision is
significantly different, from its original
version that was developed in the 1970s,
having undergone several revisions over the
past three decades.

4. Modeling- Data used (1)
 Utilizing Non-linear programming
techniques and advancements in computing
power, the IBMR in its current form gives a
fairly accurate description of the Indus
Basin Agricultural and Hydrologic System.
 D&I water uses in nine major cities located
in Pakistan are considered in the modeling
framework
 Utility function of D&I water uses are derived
from water demand curve (based on
historical water demand-price relationship)
for both domestic and industrial water

5. Modeling- Data used (1)
 Surface water is assumed to be diverted
from the closest irrigated canal
 Groundwater is assumed to be unlimited
Canals Cities
02-CBD Lahore
04-UC Gujranwala
11-JHA Faisalabad
17-SID Multan
22-USW Rawalpindi
Islamabad
25-KAB Peshawar
39-ROH Hyderabad
42-KAL Karachi

6. Modeling- Data used (1)
Water demand (Sutton 2009)
Major Industry Water demand
group (MAF)
Textile 1.103
Chemical 0.167
Paper 0.085
Food 0.078
Industrial production (CMI 2005-06 survey)
BALOCHI ISLAM
Group PAKISTAN PUNJAB SINDH NWFP
STAN ABAD
Textile 1328 764 447 74 42 1
Chemical 493 213 167 69 28 16
Paper 133 71 29 27 4 2
Food 1861 1122 556 118 36 29

7. Indus Basin Model (Revised)--Structure

8. Domestic-Industrial water transfers
 Two different scenarios:
 S 1: No cap for groundwater pumping but
pumping cost will increase with groundwater
depth
 S 2: Cap total groundwater pumping at 50
MAF (safe yield for the system) and pumping
cost will increase with groundwater depth
 Note: The Safe Yield may be adjusted to any
figure in the IBMR, it is the entirely the modeler’s
choice.

9. Dom&Ind transfers—water diversions (S1)
Surface water Groundwater
Optimized combinations of GW and SW resources

10. Dom&Ind transfers—decline in water table
(ft) (S1)
Change in depth to water table: Punjab most affected

11. Dom&Ind water transfers—crop profit (S1)
Slight reduction from dom&ind competition, decline in
benefit from increasing pumping cost as GW tables
continue to decline

12. Dom&Ind water transfers—change in crop
profits (S1) (in percent)
0.3
0.2
0.1
0
-0.1
-0.2
-0.3
-0.4
GW pumping increases by 7%.
Crop production decline by 0.01%.

13. Dom&Ind water transfers—crop profit (S2)
Larger decline in total and crop benefits when GW is
limited.

14. Dom&Ind water transfers—total benefits (S2
In drought years, industrial production declines due to
water scarcity.

15. Dom&Ind water transfers—change in crop
profits (S2) (in percent)
15
10
5
0
-5
-10
-15
-20
GW pumping decline by 14%.
Crop production decline by 5.2%.

16. Impacts of D&I transfer on provincial
irrigation profits
Crop benefit change Scenario Scenario
(%) 1 2
Punjab -0.94 -1.82
Sindh -0.29 -0.74
Others* 4.86 8.24
*Others shows benefits, but production is low.

17. Conclusions
 Using only surface water for D&I uses is
insufficient when Water Accord is enforced
(results not shown)
 When groundwater is unlimited, the impact
on crop profits is small, but the water table
(especially in Punjab) would drop
dramatically
 If total groundwater pumping is capped at
safe yield, crop profit will decrease 5.2%
 In very dry years, industrial output is affected
by water scarcity

18. Conclusions
 Major crop productions such as: basmati and
irrigated rice, wheat and sugarcane will suffer
larger impacts
 Groundwater tables will continue to decline
(and will do so even more with continued
population increase)
 D&I transfers reduce crop profits particularly
in Punjab, followed by Sindh, while other
provinces show slight improvements

19. Policy recommendations
 GW tables likely to continually decline,
salinization will increase and urban GW
sources are threatened
 Rural-to-urban water transfers common in
many water-scarce countries and likely to
occur in Pakistan as well
 Food production impacts depend on the
specific canals from which water is transferred
to urban/industrial areas can study
alternatives

20. Policy recommendations
 Impacts on rural incomes will depend on how
and if farmers are compensated for the rural-to-
urban water transfers
 Irrigation sustainability will depend on
irrigation service providers being able to
charge urban/industrial consumers
 Given scarce/fragile GW resources in parts of
Pakistan, important to more efficiently use SW
resources (additional ongoing research with
the Punjab Irrigation Department)