This paper has analysed the transaction costs and performance of water users associations from canal irrigation management in southern region of India. It has also identified the determinants of transaction cost by taking 40 water users associations (20 functional and 20 non-functional). A sample of 142 farm households was selected from the functioning WUAs and 131 farm households from non-functioning WUAs. The study has found that highest cost was incurred on search and information, followed by contractual costs. The magnitude of transaction cost incurred has been found less by the older WUAs. The study has also found that group size, contact with the irrigation officials and infrastructure were major factors affecting organisational, financial and physical performance of a WUA. Introduction of cost sharing mechanism by farmers for canal maintenance would create responsibility among water management institutions. Further, the coordination and interaction among farmers and officials, giving due importance to the existing institutional practices and developing multi-stakeholders strategy would boost the successful functioning of water users association.
Transaction cost, performance, water users association, irrigation
