Challenges in Providing Irrigation for Smallholder Farmers
While smallholder farms could significantly benefit from irrigation, irrigation companies most commonly target larger-scale or established agricultural operations. Equipment providers perceive smallholder farmers as lacking reliable access to markets, financing, or upfront capital to invest in more productive technologies. For this reason, some initiatives subsidize technologies to increase affordable access to irrigation for smallholder farmers.
The Opportunity of Solar Irrigation for Farmers and the Environment
Not only can solar irrigation pumps increase yield and income, but – under certain conditions – they can also contribute to reducing a farm’s carbon footprint. When carbon footprint reductions are measurable and verifiable, they can produce carbon credits, which can then be sold through voluntary carbon markets.
Exploring Carbon Credits to Offset Cost of Solar Irrigation
In recent years, solar irrigation companies have begun exploring ways of using carbon credits to potentially generate revenue that could help smallholder farmers offset the cost of irrigation. The potential for carbon markets to provide a parallel revenue stream that could facilitate access to solar irrigation for smallholders has generated much excitement. However, cracking the code of a viable, inclusive, accountable framework of carbon accounting for smallholder farmers is not as simple as it may (or may not) seem.
Addressing Challenges in Carbon Accounting for Solar Irrigation
“These pumps are powered by solar energy, and when they replace diesel pumps, they will produce less emissions. So, in principle there should be an emissions displacement that you should be able to monetize, and that should be your [farmer] subsidy,” says Agustin Cornejo, Principal Investigator. “But there is also variable pricing of the ton of carbon displaced as well as underwriting fees to carbon credits that the [companies] are covering, and that adds complexity to the modeling and calculation that needs to be taken into account.”
Cornejo is an energy expert with Tetra Tech, an engineering and consulting firm and partner for the Feed the Future Innovation Lab for Irrigation and Mechanization Systems. Through its global work in renewable energy, water, environment, sustainable infrastructure, and international development, Tetra Tech noted that companies were tapping into carbon credits to supplement revenues and subsidize their technologies to farmers. Leveraging the relationships Tetra Tech has built with solar pump companies, it is uniquely placed to explore the viability of subsidized-technology models. Understanding the scale, accounting principles, and contract structures (equity) used in the successful approaches would help illuminate whether carbon markets are a relevant go-to solution for every private operator. “So,” continues Cornejo, “We said, ‘let’s look at numbers.’”
Reviewing data and case studies, Tetra Tech seeks to understand how some solar pump companies have subsidized technologies to smallholder producers on a large scale and to then provide a framework that can facilitate decision-making by other companies servicing smallholder farmers.
Building Frameworks for Scalable Solar Irrigation Models
Tetra Tech brings together an interdisciplinary team of experts to review the case studies, including experts in carbon markets, an agronomist, solar engineers, and Cornejo himself, who is also an expert in finance. Each provides unique perspectives. “The carbon expert will look at the methodology, real versus theoretical carbon displacement, etc.,” says Cornejo, and emphasizes the agronomist’s role in providing a reality check to the data and theoretical assumptions. Cornejo explains, “Pumping companies are often focused on the sales of equipment and not always capable of developing models with the data they collect. By joining forces, we hope to provide important insights into what is happening on the ground.”
After reviewing the case studies for variables like the type and scale of pumps used and the methodologies for validating carbon credits, Tetra Tech will build two framework models: one for farms of less than one hectare and another for farms of three to five hectares. The structures will take some creativity. Cornejo says, “We need simplicity, and we know our proposal will evolve as the models and data become more refined. The study may help spark debate on differentiated qualities of carbon credits in solar irrigation, and perhaps trigger discussions among donors and foundations as to how best to leverage carbon markets.”
Advancing Irrigation Access and Climate Resilience
By addressing the need for reasonable, realistic standards in carbon market systems for smallholder farmers, Tetra Tech seeks to open the door to irrigation access. Though the review will mostly happen at a desk, the implications on the ground are very real. “In regions where water is scarce, where there is only one rainy season, or on land subject to climate change, farmers are especially vulnerable to meeting their margins,” says Cornejo. Access to solar irrigation pumps, made possible by carbon credits, would be a market-driven way to advance economic and climate resilience.
