The Future of Water in Agriculture in the Balkans: The Irrigation & Drainage (Eco)system Approach REPORT BRIEF AND CONSULTATION DOCUMENT Ranu Sinha, Regassa Namara, Pieter Waalewijn, and Svetlana Valieva About the Water Global Practice Launched in 2014, the World Bank Group’s Water Global Practice brings together financing, knowledge, and implementation in one platform. By combining the Bank’s global knowledge with country investments, this model generates more firepower for transformational solutions to help countries grow sustainably. Please visit us at www.worldbank.org/water or follow us on Twitter at @WorldBankWater. About GWSP This publication received the support of the Global Water Security & Sanitation Partnership (GWSP). 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Any queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@worldbank.org. Cover and report design: Melina Rose Yingling, World Bank. The Future of Water in Agriculture in the Balkans The Irrigation and Drainage (Eco)system Approach REPORT BRIEF AND CONSULTATION DOCUMENT Ranu Sinha, Regassa Namara, Pieter Waalewijn, and Svetlana Valieva 1 vuk8691 / iStock The dam on the river Rjecina, INTRODUCTION Rijeka, Croatia. Why is there a rethinking needed for the irrigation and drainage sector in the THIS Western Balkans? BRIEF HIGHLIGHTS: Most of the countries of the Western Balkans1 require major reforms to the overall institutional, policy, regulatory, and financial aspects of their water and agriculture sectors, which are at varying stages of development. In addition, to mitigate and adapt to growing climate the status of the risks and transform these sectors, they need to: (i) understand the diversity of farm types, irrigation water sources, and climatic irrigation and conditions in the Western Balkans, and how they influence I&D drainage (I&D) outcomes; and (ii) based on that understanding, rethink the sector in the investment approach to the irrigation, drainage, and agriculture Western Balkans; sectors in order to achieve greener, more sustainable, climate- resilient, and more inclusive rural development. The Western Balkans are among the best- introduces a endowed regions of Europe in terms of new investment land, soil, water, ample labor resources, and framework proximity to European Union (EU) markets. for the sector, with concrete This region has significant potential for improving its steps for how to agricultural production and productivity. The Western operationalize it; Balkan countries-- Albania, Bosnia and Herzegovina, Croatia, Kosovo, Montenegro, North Macedonia, and Serbia--are endowed with relatively abundant water resources. However, these resources are highly seasonal and spatially diverse, making I&D and highlights indispensable for productive and sustainable the outcomes and regional agricultural development. These countries benefits that can 1. The Western Balkan countries include Albania, Bosnia and Herzegovina, be expected. Croatia, Kosovo, Montenegro, North Macedonia, and Serbia 2 are characterized by economies in transition and rapidly changing demographics along with increasing urbanization. With the poor economic competitiveness of the sector, and falling incomes, agriculture tends to become an economic activity of last resort for many farmers, providing critical income only to those without other job opportunities. Modern I&D services are a critical element for managing the risks associated with climate change, and for helping to increase crop productivity and diversification, to enable the Balkan countries to compete in European agricultural markets, thereby improving farming livelihoods. Yet I&D sector development is at its historic low in terms of total area irrigated, and has declined from previous levels in several of the Balkan countries. Drainage and flood protection play an equally important role in extending the cropping area and the cropping season, but this also remains underdeveloped or poorly maintained in many places. Since the early 1990s, the World Bank has been supporting I&D development in the Western Balkans. Public I&D systems are in varying states of dilapidation, rehabilitation, and modernization. The Bank has played a major role in channelling investments to upgrade these systems, along with other sources of finance, including the European Union (EU) (in Croatia), the Abu Dhabi Fund (in Serbia) and European Bank of Reconstruction and Development (EBRD). However, underfunding in the I&D sector is a major problem due to a combination of low tariffs and limited cost recovery. This rich history of engagement has enabled the World Bank to learn some key lessons: one of them is that to break the rehabilitate-dilapidate-rehabilitate cycle, ensure optimal use of the I&D potentials created, and respond to economic, environmental, and social inclusion goals, there is a need to complement infrastructure investments with farmer (farming system)-centered investments known as the Irrigation and Drainage (Eco)system approach. This approach customizes I&D investment solutions to the prevailing and projected biophysical context of the Western Balkans--including climate change, crop choices, and agricultural markets--and seeks to reduce environmental damage and ensure the sustainability of both water resources and I&D service delivery. However, it does not propose a wholesale alternative to an infrastructure-based investment strategy; instead, it builds on it and strives to put the sector on a more sustainable, resilient, greener, and more inclusive development path. Economic analyses show that new public irrigation systems, whether open or pressurized, will only be profitable with a high level of uptake and a substantial share of users opting to grow high-value crops; and our experience in the region shows that often these conditions are not met in practice. 3 The Irrigation and Drainage (Eco)system approach aligns with the World Bank’s Green Resilient Inclusive Development (GRID) approach.2 The GRID framework, which aims for zero pollution and the creation of a toxic-free environment, as well as inclusive and resilient development, is highly relevant for rethinking the I&D sector. These goals require comprehensive and multipronged policy and investment responses, and enhanced pollution monitoring, prevention, and remediation in order to simultaneously address water and food security objectives while also heeding the growing calls for sustainability and “building back green” as a prominent economic recovery model. However, few countries in the Balkan region have an integrated strategy for how I&D investments can drive sustainable, resilient, inclusive, and greener agricultural growth. 2 What are the factors driving transition & transformation of the I&D sector in the Western Balkan countries? CLIMATE CHANGE Arable agriculture in the Western Balkans is practiced in four distinctive agroclimatic zones: ZONE 1 ZONE 2 ZONE 3 ZONE 4 The Pannonian Plain, The Adriatic Coast, in the The hills, The isolated which is in the northern southwestern part of the which cover plains of and northeastern parts region, includes significant Central Serbia Kosovo of the Balkans, covering areas of agricultural land and parts of and North large areas of Croatia, in Albania, Croatia, and Bosnia and Macedonia. Serbia, and the northern some areas of Bosnia Herzegovina; parts of Bosnia and and Herzegovina, and and Herzegovina. Montenegro. The region is generally well endowed with water resources, though with shortages at specific times and in specific places. The impact of climate change is expected to be modest in the short term but to accelerate markedly from the mid-century on, making the entire region hotter, the north wetter, and the south drier. By 2050, the following changes are expected: Average temperatures will rise by 0.5-1.5˚C, slightly less in the north and more in the south. Maximum temperatures will also rise, and there will be fewer cold days. With a predicted temperate continental climate, this may lead to increasing snowmelt, resulting in the potential for floods. This will also lead to higher 2. The World Bank Group’s corporate Climate Change Action Plan strategy for 2021-25 presents a paradigm shift of the World Bank toward a Green Inclusive Resilient Development (GRID) approach, which is responding to the triple crises of poverty, climate change, and inequality. 4 consumptive requirements of crops and more erratic water availability in the summer, particularly in the Southern Balkans. Precipitation will increase in the north and decrease in the south, with higher levels of precipitation in early spring and late autumn, and lower levels in summer. There will also be more drought days (see Figure 2.1). Inflows from the Danube, Sava, Tisa, and Drava rivers will be determined by climate changes further north in Europe; average flow is not expected to decrease significantly over this period, but the risk of flooding may increase. Flows for the other rivers will be influenced by precipitation changes within the region, including increased seasonality and variability. FIGURE 2.1 Projected Change in Annual Precipitation in the Balkans 2071-2100 Compared to 1971-2000 AUSTRIA HUNGARY SLOVENIA ROMANIA CROATIA BOSNIA SERBIA AND HERZEGOVINA MONTENEGRO KOSOVO BULGARIA ITALY NORTH MACEDONIA PROJECTED CHANGE IN ANNUAL PRECIPITATION ALBANIA 2071 - 2100 GREATER THAN 10% 5.01 - 10% -4.99 - 5% -9.99 - 5% IBRD 45905 | APRIL 2021 LESS THAN -10% GREECE This map was produced by the Cartography Unit of the World Bank Group. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of the World Bank Group, any judgment on the legal status of any INTERNATIONAL BOUNDARIES territory, or any endorsement or acceptance of such boundaries. There is large spatial and temporal variation within these countries and, in addition to the type and scheduling of crops, the need for irrigation will depend on the current and expected changes in climate and rainfall patterns across the region. This underscores the importance of having adequate I&D throughout the region to enable crop intensification and the production of higher-value crops. Although I&D services are needed in all the Balkan countries, the northern 5 parts of the region will require I&D more as insurance, and to extend the season in the wet months. In the southern regions I&D will be needed to allow cropping in the hot and dry months, and to provide insurance in the spring. ACCESSION TO THE EUROPEAN UNION, THE GREEN AGENDA, AND STRUCTURAL TRANSFORMATION OF THE AGRICULTURAL SECTOR Some of the Balkan countries are undergoing the process of accession to the EU and aligning with the Green Agenda; and the agricultural sector in the region is in the process of structural transformation. All of these are contributing factors that underscore the need to rethink investment approaches in the I&D sector. These factors, and the transition requirements and enablers for these processes are detailed in Figure 2.2. FIGURE 2.2 Summary of the Major Drivers of Transition in the Western Balkans DRIVERS OF TRANSITION IN THE WESTERN BALKANS The Western Balkan countries are in a process of transition driven by the accession to the EU, the Green Agenda and climate change. Transition Drivers Transition Requirements Transition Enablers Rethink regulatory, institutional, European Harmonization and negotiation of 35 separate and infrastructure investment Union “chapters” of the Acquis Communautaire approaches in water, food, Accession energy sectors. Policy and grant alignment with Green Agenda themes: Shift to Establish criteria Enhance Active national harmonization The integrated for environmental resilience to Water Framework Directive, Green water protection and the through and related EU green Agenda manage- management of adaptive water directives. ment on a water quantity and and crop basin-scale. quality. practices An (eco)system approach is Shift to integrated water management on a basin needed that recognizes the Climate scale and establish criteria for environmental different dimensions of the Change protection and the management of water quantity farming systems in the region, and quality. the agro-climatic and structural elements. Agriculture across the Balkans is undergoing a Farm-scale process of structural transformation. Irrigation can Better match needed between play a critical role in supporting this process and diverse farm system needs with Structural appropriate irrigation options. improve production efficiencies on the farm and Transformation beyond. 6 DIVERSITY OF AGROCLIMATIC ZONES, AND TYPOLOGY OF FARMS IN THE BALKANS The Balkans are characterized by three distinct typologies of farms, dominated by the small family farm. The three types are: Small household Mixed-income Full-time farms: commercial farms commercial farms Small farms producing Medium-sized farms (typically Large farms producing almost largely for consumption 1-5 ha), producing crops entirely for commercial sale, and by the household and partly or mainly for sale, often providing the majority of the extended family but gaining most of the farm household income. (There (typically < 1 hectares household income from non- are now 6-30+ hectare farms in (ha); covering mostly agricultural jobs or pensions all regions, usually accounting Albania, Kosovo, and (Albania, Kosovo, North for 20-40 percent of the land, for North Macedonia); Macedonia); sometimes example in Adriatic Croatia, where spread over two or even more than 65 percent of the land three adjacent farm plots (for lies on holdings of more than 100 example, Adriatic Croatia); hectares; as well as in Montenegro and Vojvodina, where nearly 40 percent of the land lies in holdings of more than 100 hectares). Jana_Janina / iStock The agricultural fields of southern Croatia. 7 PRIVATE IRRIGATION, AND THE ROLE OF MUNICIPALITIES IN IRRIGATION SERVICE DELIVERY Across the Balkans, more than 60 percent of irrigating farmers use groundwater, and almost 40 percent use surface water. One conclusion that emerges from this data is that multiuser irrigation systems, an area of investment upon which governments and donors tend to focus, represent only around a third of the irrigated farms in these countries. Private irrigation, where just one farm is responsible for irrigating their farm plot, from abstraction through to application, is the dominant system in the region. The data for four countries (Croatia, Kosovo, Montenegro, and Serbia) indicate that more than 150,000 farms use this approach, and the total for the region may exceed a quarter of a million farms, the large majority operating without any formal permit. Individual irrigation tends to be institutionally simple and economically profitable and is widely used to produce high-value crops that can easily cover the costs of irrigation. However, in some places unlicensed groundwater withdrawals are creating a risk of overexploitation of scarce water sources. Municipalities and their I&D units are active in many countries of the Western Balkans. Municipalities act as the central point for identifying needs, as well as for promoting and financing preparatory studies, supervising and financing the construction of infrastructure, and managing irrigation facilities. Sometimes the management is undertaken directly by the municipalities’ Irrigation & Drainage Units (IDUs), as is the case in Albania; in other cases, this is handled by water utility companies (WUCs). The role of these institutions as service providers needs to be strengthened and incentivized to be able to improve overall I&D services across the region. studiodr / iStock Greenhouses plantations in Albania. 8 3 Enabling Green, Climate-Resilient, Sustainable, and Inclusive Agricultural Transformation in the Western Balkans: The Irrigation & Drainage (Eco)system Approach. DEFINING THE APPROACH Irrigation and drainage are inherently part of a complex socio-technical-ecological system that is influenced and affected by climatic, agroecological, socioeconomic, technological, governance and policy, as well as behavioral factors. These factors are referred to as the (eco)system3 of the I&D sectors. They play a powerful role in influencing the outcomes from investments in irrigation, drainage, and agriculture; therefore, they need to be considered when designing and prioritizing interventions. This approach has redefined the investment framework for identifying, designing, prioritizing, sequencing, implementing, and monitoring I&D sector interventions in a holistic and targeted manner in order to address agricultural water management constraints for a variety of farm types and contexts. It is oriented toward supporting governments in meeting the triple objectives of green, inclusive, and climate-resilient irrigation and agricultural growth. WHAT ARE THE KEY CHARACTERISTICS THAT DISTINGUISH THE IRRIGATION & DRAINAGE (ECO)SYSTEM APPROACH FROM “BUSINESS AS USUAL”? The irrigation & drainage (eco)system approach is an integrated “farm-centric” investment strategy that targets specific I&D infrastructure and non-infrastructure solutions to address the constraints and needs of various farming systems. As Figure 3.1 shows, the (eco)system approach focuses on targeting I&D solutions by: (i) making a deliberate effort to ensure that optimal use of the improved or new I&D potential that is created by investments in I&D matches the way various farm systems actually use irrigation water; (ii) providing all farming systems, from small- scale to commercial producers, with tailored approaches to food production; (iii) linking climate risk management to other forms of risk management (insurance, trade, phytosanitary, and agro-environmental measures, and other market-based mechanisms); 3. The term “(eco)system” is not limited to the natural ecosystem of living and nonliving organisms, but instead is a broader term to describe the socioecological systems that comprise irrigation. That is, it is a combination of the hydrological, environmental, social, economic, governance, and human systems that interact upon and influence I&D outcomes. 9 (iv) instituting policy reform of delivery mechanisms, for example creating better coordination mechanisms between different tiers of government, as well as between sectors; and between government and the private sector; and (v) integration from the farm to the basin scale, with an emphasis on water security and climate resilience (see Figure 3.1). FIGURE 3.1 The Irrigation & Drainage (Eco)system Approach Theory of Change PUTTING THE I&D ECO(SYSTEM) APPROACH INTO ACTION Dominant irrigation Agro- and drainage scenario Implementation climatic • Flood Areas Zones protection • Drainage • I&D infrastructure Zone 1: options Farm Pannonian • Large-scale Typology plains irrigation • Strengthening • Groundwater/ I&D governance Full-time private structures, commercial irrigation irrigation service farms delivery & management • Summer Long with irrigation Term multi-agency Zone 2: • Storage Outcomes Goals coordination The (eco)system Theory of Change Adriatic • Hydropower coast • Incentivize • Reduced • Enhanced nexus farmer- environmental water and • Commercial led irrigation footprint of food security Mixed greenhouses development agriculture • Reduced rural income • Green & • Resilient poverty commercial • Multi-user decarbonize Covid-19 • Green farms irrigation irrigated recovery Inclusive • Small-scale agriculture • Increased Resilient Zone 3: private Income Development Hills • Activate & irrigation • Groundwater/ strengthen agriculture springs knowledge services and • Large-scale access to Household irrigation markets and farms • Sprinkler/drip value chains for Zone 4: irrigation for irrigated Isolated high value agriculture plains crops • Basin to farm • Groundwater/ smart irrigation & private climate services irrigation 10 utamaria / iStock Mountain landscape in North Albania with river Koman. This approach requires strong “environmental stewardship.” To align with the Water Framework Directive, EU Accession, and the Green Agenda policy priorities of the Balkans, all future I&D investments should be coupled with improved environmental standards and practices that meet the requirements of reduced water pollution and the negative environmental impacts of increased irrigation. It offers a diversified irrigation service delivery model, which includes support to private irrigation. In multiuser or public irrigation systems, a move toward on-demand irrigation water services is encouraged in order to enable the flexibility, reliability, and adequacy of irrigation water supply. This includes support to private irrigators who are making investments and innovating to valorize the I&D infrastructure through the conjunctive use of surface and groundwater resources. It also focuses on creating clear institutional responsibilities, accountability, effectiveness, and regulations. (See Annex 1 for a brief overview of the types of institutional and policy reforms that it will be necessary to make in the irrigation management systems in the Western Balkan countries.) It promotes new performance monitoring standards and metrics of success. Identification and application of holistic performance indicators goes beyond narrow physical criteria to account for the realities of the I&D (eco)system: this includes agricultural productivity, environmental sustainability, climate resilience, flexibility, reliability and adequacy of the irrigation water supply, and customer satisfaction, with a particular focus on gender inclusivity. This can set service providers on a path toward providing reliable, safe, inclusive, transparent, and responsive services that align well with the World Bank’s ongoing work of developing performance assessment tools for the Irrigation Operator of the Future tool. 11 It relies on the application of innovative financing models, including performance-oriented fiscal transfers to municipalities and results-based financing of individual projects or programs, and promotes partnerships at the local and national levels of administration to leverage financial resources, harmonize policies, coordinate investments, and ensure the principle of financial additionality. It offers flexibility in terms of timelines. Proposed interventions could be either short-term (setting the stage and preparing for longer-term investments) or long-term, spanning five or more years. To achieve better outcomes, the choice of interventions should be grounded in local realities for what farmers need to better manage their use of irrigation water; but the broader lens does not have to make interventions more complex. By understanding local complexities and leveraging opportunities, simple interventions can be crafted in such a way that they deliver high impact at low cost. (Box 5.1 describes such an approach being tested in Africa.4) BOX 3.1 On-Farm to Catchment Management in Ethiopia • The management of a catchment was successfully demonstrated in Northern Ethiopia, Tigray, illustrating how on-farm strategies are connected to broader catchment conditions. • A series of small dams (see photo), runoff- stopping structures, and reforestation were implemented following a rural diagnostic of water user economic, infrastructure, social, and environmental conditions. • As a result, flooding in the valley was reduced and the water storage in the catchment, especially in the valley floor, was improved. • This led to an extension of the growing time and enabled the production of alternative crops. 4. W. Loiskandl and R. Nolz. “Requirements for Sustainable Irrigated Agriculture.” 2021. Agronomy Vol (11): 306. 12 4 Implementation Options for the Irrigation & Drainage (Eco)system Approach IMPLEMENTATION AREA 1: Strengthening I&D governance structures, improving irrigation service delivery and management with multiagency coordination. This can be done by creating new opportunities to break silos across agricultural, water resources, environmental, and related agencies; reform irrigation institutions; and enhance performance via modernization and innovative measures for I&D service delivery. It is important to monitor the performance of agencies against green, resilient, inclusive, and gender-sensitive services and the of "degree of technological innovations applied", as well as by addressing the information gaps inherent in irrigation scheme capacity, functionality, and sustainability. This in turn can better support farmers as they transform their productive capacities. Next, it is vital to respond to the diverse needs of different farming segments and water users by increasing accountability, creating autonomy in the service delivery chain, and separating functions. IMPLEMENTATION AREA 2: Green and decarbonize irrigated agriculture. Some of the region’s irrigation systems need repurposing to catalyze nature-based solutions, power generation, pollution prevention, and circular economy approaches to the adoption of wastewater reuse for irrigation. When investments are made to upgrade drainage systems, soil health in irrigated agriculture can be improved. It is also important to encourage farm advisory services to adopt new crop varieties that can adapt to climate stress; to target small producers and female decisionmakers; and to increase investment in training farmers and ministries on climate-resilient agricultural water management practices. IMPLEMENTATION AREA 3: Incentivize Farmer-Led Irrigation Development (FLID). Since a large majority of farmers are “individual” irrigators, this is an opportunity for governments to support their development, consolidation, and sustainability through regulations that allow for FLID, which requires a different government support model than those in which farmers use irrigation from public schemes (Izzi et al 2021). (See Annex 1 for specific steps on how to operationalize FLID in appropriate farming systems and agroclimatic zones in the Western Balkans). IMPLEMENTATION AREA 4: Activate and strengthen agricultural knowledge services and inclusive access to markets and value chains for irrigated agriculture. This can include interventions such as: (i) promoting partnerships with the private sector (connecting farmers to off-takers); (ii) promoting and scaling existing opportunities for youth agro- 13 entrepreneurs; (iii) improving and enhancing marketing and agricultural input support to these farms, which increases their opportunities to market and sell their commodities; and (iv) training and coordinating farmers to organize around specific commodities in order to enable small household farms and medium mixed-income farms to transition from low-value subsistence to higher-value agriculture. IMPLEMENTATION AREA 5: Multipronged and customized infrastructure solutions for collective and bulk water supply schemes. These are to be selected, depending on the targeted farm type, to address core infrastructure and water access constraints: (i) modernization and improved management of poorly performing multiuser irrigation systems; (ii) rehabilitation, expansion, and decommissioning of dilapidated multiuser irrigation systems; (iii) rehabilitation of drainage systems; (iv) construction of new multiuser irrigation systems; (v) investments in storage, flood protection infrastructure, and river works to mitigate the impacts of climate change; and (vi) separate service delivery functions and business models for different types of infrastructure, outcomes, and timelines, which will determine the cost, time frame, technology choices, financing solutions (PPP or not), and integration with other infrastructure services. IMPLEMENTATION AREA 6: Invest in basin-to-farm “smart” irrigation and climate services. This entails modernizing how agencies observe, forecast, model, and disseminate real- time climate, water, land, and agronomic data such as precipitation, evapotranspiration (ET), temperature, wind pressure, humidity, soil, and river flow data services to help irrigation service providers design, plan, adapt, and modernize infrastructure, and efficiently allocate water to end users. It is also necessary to improve access to digital and mobile technologies to help farmers manage climate risks by direct citizen engagement in providing climate data services to end users. This approach, and its related areas of implementation, provide a platform for partners in the Western Balkans to dialogue about transformative investments in the I&D sector. Application of the I&D (eco)system approach offers governments a menu of investment options that are tailored to scale the potential of diverse farming systems to tackle climate risks and accelerate innovation in the I&D sectors for more green, inclusive, and resilient growth. 14 ANNEX 1: Institutional & Policy Actions Matrix for the I&D (Eco)system Approach Dominant Irrigation Suggested Irrigation Service Suggested Irrigation Service Management System Delivery Reforms & Action(s) Delivery Reforms & Action(s) (common to all zones) (specific to zone) Dominant Farm Typology by Zone Zone 1: Pannonian Plains Water utility companies Water pricing policy for FLID for private irrigators: (full-time commercial (majority are public, some irrigation: Assess existing Step 1: Conduct a beneficiary farms with low-value are private) tariff policies, or design a new diagnostic to define FLID crops; average 6-10 ha in tariff policy that aligns with eligibility criteria for male/ Croatia/Vojvodina) provisions of the European female farmers (Actors: Donors Commission Directives & national/local agencies). including cost recovery of Step 2: Infrastructure water services; adequate assessment, prioritization incentives for users to use of private infrastructure water efficiently; reduction in development (Actors: Donors, environmental degradation public sector agencies, using a “polluter pays principle” farmers). Step 3: Assess (for example, a two-part tariff potential to scale – financial, area + volumetric fee); (Actor: technical capacity, types of National regulatory authority or crops grown, etc. for private line ministry). irrigators (Actors: Donors Environmental policies: To and public agencies). Step assess readiness to align 4: Create a multistakeholder with various EU WFD, CAP, alliance (Actors: public officials, and related directives, the financial institutions, irrigation designated competent equipment suppliers, value authority to carry out analysis chain actors, farmers). Step of pressures on water bodies 5: Enable the flow of funds: from I&D services; identify examine different procurement what might be blocking a good options to help farmers to status; and set mutually agreed afford infrastructure/equipment upon environmental criteria for (Actors: govts, donors, concerned irrigation providers. equipment suppliers, value chain actors, farmers). Coordination capacities: Zone 2: Adriatic Coast Albania & Montenegro Assess the capacity of Legal: Prepare and adopt a (Full-time commercial Municipalities, through multiple agencies and develop WUO act if it is not yet available farms (6-30+ ha); mixed- I&D units, cooperatives, strategies to establish common (Actors: National governments) income commercial farms municipal multiutility regulatory frameworks for (1-5 ha) companies; Croatia the use of European funds to 57% of high-value crops Water utility companies; fulfill pre-accession criteria in in Adriatic Croatia, BiH Municipalities, water a coordinated manner across Albania, some parts of utility companies, WUAs, multiple line agencies. Montenegro & BiH) cooperatives. Regulatory instruments: Zone 3: Hills (mixed- Actors: Water utility Develop policies that FLID for private irrigators income commercial farms companies encourage cost reduction of (Same steps as in Zone 1) in Central Serbia & parts service provision by increasing of BiH) the levels of operational, conveyance, and energy Zone 4: Isolated Plains Kosovo Water utility efficiency, based on proven Legal: Prepare and adopt WUO of Kosovo & North companies; North and solid technologies for act if it is not yet available Macedonia (Household Macedonia WUAs, water improved metering, regulation, (Actor: National government) plots (0-1 Ha); mixed- utility companies, water and control of flows and FLID for private irrigators income commercial farms management enterprises hydraulic heads. (same steps as in Zone 1) (3 ha) 15 W21049