At the dawn of the third millennium the problems associated with large-scal
e irrigation lie largely unresolved. The outcomes of government policies ra
rely correspond with expectations, leading to conflict and misunderstanding
between federal governments, local agencies and farmers. This paper examin
es the mis-match of expectations between policy implementers and policy rec
ipients in the implementation of one government policy (tertiary interventi
on) in the Muda irrigation scheme, Malaysia. The findings illustrate that t
his policy is not achieving the productivity increase or water saving expec
tations for which it was designed, instead, tertiary intervention has incre
ased the capacity of the farmers to unofficially control the distribution a
nd supply of the water resource and to engage in off-farm productive and no
n-productive activities. This results in: a significant over-supply of wate
r; the inefficient use of this supply; and a reduction in yields without a
reduction in incomes. Importantly, tertiary intervention has enabled the fa
rmers to diversify their livelihood strategies whilst retaining access to t
he rice-farming culture. The findings presented in this paper serve to illu
strate the significance of 'actor' expectations on policy outcomes and agra
rian change.