In recent decades, approaches to evaluating irrigation efficiency have undergone a radical reevaluation. Classical models considered drainage water “lost” to irrigation by flowing out of the system. The recognition that drainage water can remain in the system and become available for use by downstream irrigators has forced the reassessment. Irrigation may be relatively inefficient at the irrigation system and field levels but quite efficient at the basin level. The implications for small-scale, gravity-flow canal systems managed by farmers, which constitute 85% of the world's irrigated area, are significant. These implications are explored in an historic and ethnographic analysis of the chain irrigation system of the Orbigo valley of northwestern Spain. This system of drainage and reuse helps to account for high and sustained agricultural productivity by farmers in the region over several centuries. The property rights institutions devised by farmers to manage this system are discussed and its internal organization compared with south Asian cascade irrigation.