Based on FAO experience in the Region, the paper first highlights a diagnosis of the main issues facing agricultural water management, focusing on key policy, managerial and technical aspects, and on the lessons learnt from past experience. Then it proposes strategic options that are likely to address these issues, with due consideration to ensuring the highest possible level of food security, resource sustainability and environmental preservation. The foundations of the proposed options stem from the need for countries to chart new irrigation strategies that are marked by departure from previous approaches and which address the underlying causes of the problems rather than the symptoms. They are based on improving productive efficiency of irrigated and rainfed agriculture and removing policy constraints by improving water allocative efficiency. The option of virtual water, as a complement of the proposed reforms, is assessed and the extent and conditions of its applicability are discussed.