Throughout Asia, irrigation has been the lead input in growth of cereal yield. In the 13 Asian nations included for analysis, all of the countries appear to lie on virtually the same irrigation/ fertilizer/HYV production function. Many observers believe that improved efficiency of water use through improved irrigation management and technology. This expectation may be largely unfulfilled, however, due to a fallacy of composition, since water losses measured on a local basis are often recovered in other parts of the system. Growth in total irrigated area in most Asian countries is declining. Only in India does growth exceed one percent per annum. There is a great need for data on cost of irrigation development and on the economic performance of recent irrigation investments, During t, coming years, irrigation investments will have to be made with increasing care in order to maintain irrigation as a cost effective source of agricultural growth.