Clearly defined and legally enforceable water rights and responsibilities for water operators and users in an irrigation system are the foundation underlying the incentives for conserving water and improving irrigation efficiency.
The establishment of a system of water-use rights could empower water users in all sectors, as it establishes both rights and responsibilities to specified water use. If water is allocated to other sectors (typically urban and industrial), irrigators and other users would need to be compensated. Moreover, establishing water rights can serve as an incentive to invest in productive water use, as such rights convey security to use water for a prolonged period. Furthermore, water-use rights provide incentives for all sectors to invest in water-saving technologies, as water outside of the existing water use rights would have to be obtained at a certain cost.