Technological developments in rice production in Asia have greatly increased the potential returns to irrigation investments. It is likely that a substantial amount of resources will be allocated to irrigation development in the next two decades. But past experience suggests that the returns actually realized on these investments will be disappointing unless greater attention is paid to problems of effective water management, particularly in the main irrigation system. Human and institutional capabilities, and not physical or financial capital, are likely to be the most limiting factors in dealing with these problems.