erosion. The highland minifundios accelerate soil degradation processes. In the northern highlands, the production area of family agricultural production units is three to five hectares. Excess grazing and other agricultural activities have contributed to salinization and soil compression. Agricultural runoff is one of the main contributors to water pollution in Bolivia, together with domestic municipal wastewater and dumping by industries and mines. The greatest percentage of the pollution load is due to diffuse dumping from agricultural and fishing activities and runoffs of urban areas. There are no regulations or controls over major dumping from non-specific sources, despite its volume and toxicity. History of the irrigation sector Agricultural land past and present trends The Spanish colonists, soon after their arrival in the central Andes in the 16th century, appropriated the best farmlands on the coasts and valleys and pushed the indigenous population to the more inhospitable highlands. The highlands had been grazing grounds for llamas and alpacas, but had not been used for agriculture because of their low productivity and high climatic risks. Under the new circumstances, the highlands became the center of Bolivia’s subsistence agriculture. Traditionally Bolivia has been dependent on the mining sector as a source of fiscal revenue and foreign exchange, and directed few resources towards the agricultural sector. Following the 1985 economic reform, the government of Paz Estenssoro aimed at moving towards a distortion-free market economy that would attract private investment to the agricultural sector. The World Bank considers that some of the reforms undertaken at that time were ill-informed, especially “the lack of constructive governmental intervention to provide needed public goods such as land titling, agricultural research and extension, and irrigation infrastructure.” As a result, the agricultural sector has lacked the underpinnings in both human and physical capital that facilitate development. The absence of new production and irrigation technologies left farmers with limited opportunities to raise their productivity and income discouraging investment. In 1999 the total area equipped for irrigation added up to 128,240ha. The irrigated area has almost doubled since. More than 50% of the irrigated area is concentrated in the provinces of Cochabamba and La Paz in the center of the country. Institutional development During the 1990s, water management was characterized by a sectoral approach with multitude of actors and legal approaches and overlapping of responsibilities. The Ministry of Rural Affairs and Indigenous People, the National Water Authority at the time, together with the