Through the 3rd session of the National Assembly Standing Committee held on September 12, the Draft Law on Irrigation was brought up for discussion and public consultation. Many important innovations have been added, particularly in the financial mechanism for irrigation services, such as regulations on the price of irrigation services replacing irrigation fees, and the socialization of investment in irrigation works.
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Regulations on Conversion from “Irrigation Fee” to “Irrigation Service Price”
The conversion from “irrigation fee” to “irigation service price” is a progressive step in the financial mechanism of irrigation work as mentioned in the Draft Law on Irrigation.
Irrigation Fee is defined in the 2001 Ordinance on Exploitation and Protection of Irrigation Works, according to which, irrigation fee is the service fee on water collected from organizations and individuals using water or providing services from irrigation works for agricultural production purposes, contributing to the management, maintenance, and protection of irrigation works. Thus, irrigation fee can be roughly understood as the cost that organizations and individuals must pay when they need to use water sources for agricultural production.
Irrigation Service Price according to the Draft Law on Irrigation is defined as follows: Irrigation service price is the cost to be paid for a unit of irrigation service product. This concept, though brief, is quite succinct and comprehensively represents the cost to be paid in irrigation services as well as the responsibility of organizations and individuals requiring water use in irrigation work.
Also in this Draft Law, the irrigation service price is implemented in accordance with the law on pricing and is stipulated at specific prices, price frames, or minimum and maximum prices. The provision and use of irrigation services are conducted through service contracts per season or per year based on the irrigation service price.
The Draft Law provides regulations on the policy for irrigation service pricing as follows:
- Organizations and individuals using services from irrigation works must pay the service provider based on the agreed irrigation service price or as per the regulations;- Encourage efficient and economical use of water from irrigation works by organizations and individuals;- Motivate the organization and management to exploit irrigation works to enhance capacity, advantages, and improve efficiency;- Implement price subsidies for irrigation services serving public purposes;- The State has policies to support funds for organizations and individuals in case of disaster prevention and control.
The irrigation service pricing must ensure principles about:
- Ensuring cost recovery for the management, operation, and maintenance of irrigation service activities;- Pricing follows market mechanisms for organizations and individuals using irrigation services not for public purposes;- Ensuring fairness and reasonableness for organizations and individuals using irrigation service products;- Ensuring the implementation of State policies and adapting to the actual situation;- Timely price adjustments when pricing factors change.
Moreover, when determining the irrigation service price, consideration must be given to related factors such as State’s socio-economic development policies in each period; types of irrigation works; irrigation service quality; supply capacity, technological level, quality standards of irrigation service products, and payment capacity of the users of those products and services.
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At the third session of the Standing Committee of the National Assembly, the Minister of Agriculture and Rural Development Nguyen Xuan Cuong stated that the regulation to use "irrigation service price" instead of “irrigation fee” aims to ensure compatibility and consistency with the current legal system, as the Law on Charges and Fees does not stipulate “irrigation fee”. At the same time, implementing the irrigation service price in irrigation work ensures the true nature of the “service,” helping service users understand the commodity nature of water, viewing irrigation services as input services for production, contributing to raising the awareness of water-saving use.
Additionally, the State also has policies to exempt or reduce the cost of using irrigation services to support irrigation services for public purposes, support for livelihoods in difficult areas, remote areas, border, and islands, and support organizations and individuals in cases of natural disaster damage through direct funding to the managers of works or organizations and individuals using irrigation service products eligible for exemption or reduction.
According to the plan, the Draft Law on Irrigation will continue to be finalized for submission to the National Assembly at the second session in October./.
