Preheat the oven to 350 degrees.
Mix the water, brown sugar and peaches in a medium size sauce pan. Simmer for 15 minutes.
Add the butter to a 1.5 quart baking dish and sit it in the oven while you prepare the dough mixture.
Mix the flour, granulated sugar and milk gently until well blended. Pour the mixture over the melted butter but don't stir. You'll notice it rising and thickening along the side of the dish - this is normal (and a good thing!)
Lay the peaches on top of the mixture and pour any remaining syrup over the top.
Bake for 35 minutes or until the top is brown. Immediately sprinkle the 2 tablespoons of sugar on the top crust and let sit until warm.