| Abstract | This study investigates institutional, technical and economic aspects of sustainability in irrigation systems, with an emphasis on the interplay between individual farmer’s performance and features of collective action. Panchakanya Irrigation Scheme, located in Chitwan district of Nepal, was selected for the case study. From primary data, a farmers’ typology has been established, based on production strategies features (cropping systems and livelihood sources). Crop budgets and water delivery at farm level (secondary data) were established and jointly analyzed in order to assess land and water productivities. Statistical tests were performed and demonstrated significant differences in cropping systems and performances among farmers’ types. Production, gross income and net income are statistically significant between farmers’ types. Type-II farmers (Full-time commercial farmers) are more intensified, productive and commercially oriented. Analysis shows that intensification, diversification and commercialization of crops seem to be the pathways to farmer’s economic improvement. It was found that farmers who practiced cropping system having at least one vegetable or potato are generating higher net income than those practicing cereals, pulses and oilseeds. So cropping strategy is one of the major factors to raise their income. Furthermore, water productivity of vegetables and potato are higher than cereals and the net income per unit of water delivery (productivity) derived from these crops are much higher than cereals. Qualitative analysis of collective action has focused onto system maintenance and water services, and was based on both farm typology and location along canals (head, middle, tail). Institutional analysis focused on the current status and capacity of the WUA, based on Ostrom’s eight efficiency and sustainability principle. Also, WUA’s capacity assessment has been performed and compared WUA’s performance at present times and five years ago, as perceived by irrigators. Finally, semi-quantitative assessment of farmers’ satisfaction of water services WUA operation was also carried out through direct interviews. Results show that, while both institutional and capacity assessments performed at WUA level indicate that the scheme seems to perform adequately and even improved as a collective irrigation enterprise, individual perceptions reveal that tail-end farmers, regardless of their farming style, are more deprived of water than others in times of water scarcity. As a result, commercial ones resort to private pumping at own cost, and all are being significantly more reluctant to pay for canal water services. Such situation results in a weaker financial situation at WUA level. The research concludes that a more appropriate water charging system should be developed, recognizing the different levels of irrigation water supply that exist within the scheme, and compensating tail-end farmers for low insurance of supply and higher pumping costs. |