Water is being transferred out of agriculture to meet growing demand in other areas, often without agreement of compensation to famers with irrigated land and water rights. The withdrawal of this water affects the rural household, economy, and the environment in a number of ways. This paper argues that to ensure efficient, equitable, and sustainable water use, to reduce poverty and improve the well-being of the community, irrigation and water resource policies need to take into account all uses and users of water within the irrigation system.