A five-point USAID strategy to improve paddy farming in Northeast Thailand is detailed. The strategy calls for: (1) rehabilitating and/or completing existing small-scale irrigation systems with emphasis on on-farm water distribution; (2) developing new small-scale irrigation systems, i.e., reservoir systems and, where feasible, pumping from groundwater sources; (3) adopting a comprehensive approach to irrigation system development that includes on-farm water distribution and appropriate provision for operations and maintenance; (4) conducting operations research on ways to organize farmers in effective water use and maintenance of irrigation facilities; and (5) promoting increased and diversified agricultural production in the service areas of established irrigation systems, including attention to agricultural extension, market development, and food processing industry. Eleven AID-specific recommendations for planning and implementing on-farm water systems are listed.