Smallholder farmers in the Global South are gradually expanding land under irrigation as technologies such as solar-powered pumps become cheaper and more accessible. With the benefits clear, how can we scale farmer-led irrigation (FLI) to improve the lives of small-scale farmers, increasing food and water security, enhancing resilience to climate change and promoting economic development?
At the global level, experts and stakeholders are discussing this question and exploring promising approaches for FLI, including financial mechanisms, affordability of energy, institutional arrangements, minimizing potential environmental impacts, and ensuring no one is left behind.
Farmer-led irrigation is a widespread phenomenon that takes many shapes; its characteristic is that it is a process whereby farmers drive the establishment, management and improvement of irrigated agriculture, mainly to increase the resilience of their agricultural systems. Typically, it is unrecognized in a policy setting.
“There are fundamental questions on whether and how to drive this form of development. Governments, financial institutions, NGOs, irrigation practitioners have to un-learn and re-think approaches and reflect on the role they can play, while doing no harm, supporting and not putting the brakes on farmers’ creativity and problem-solving” shared Pieter Waalewijn, the World Bank.
So we asked implementers, active in accelerating FLI development on what works well and what needs some more attention going forward during a World Water Week online session?*
A first point is that more attention at the policy level is needed. The Framework for Irrigation Development and Agricultural Water Management in Africa, recently published by the African Union Commission identifies FLI development as a key pathway to future agricultural water management development. There is a need to support member states in designing and implementing policies to facilitate the enabling environment of FLI development to flourish.
“FLI is a fast-growing sector and should be supported by governments – by ensuring for example that water abstraction can be done in a lawful manner and that farmers have secured water and land rights, or that access to urban markets and peri-urban agriculture are promoted”, said Mure Agbonlahor, the African Union Commission.
“Policies are really important – and not just agricultural policies, including for example trade policies and those supporting extension services”, emphasized Stephane Lako, Ministry of Agriculture and Rural Development, Cameroon & Water Youth Network member.
Revisions of trade or fiscal policies could be key to facilitate access to affordable technologies. In Cameroon for example, irrigation equipment is not recognized today as agricultural equipment and thus not eligible for tariff exemptions. And, Toby Hammond, Futurepump shared that the recent loss of VAT exemption in Kenya resulted in a price increase of 14 % on the solar irrigation pumps his company manufactures.
Irrigation technologies and services offered by suppliers need to match farmers’ needs and challenges.
“We need to include farmers so we know what the farmers need, and suppliers can create products for those needs”, emphasized Onyaole Patience Koku, Replenish Farms in Nigeria & Global Farmers Network member.
This is particularly the case when it comes to solutions which increase the accessibility and affordability of irrigation technologies. Toby Hammond, Futurepump, explained that “in Kenya, for example, the price of systems is the main problem. Futurepump launched an entry level pump that starts at 330 USD - but this is still a large sum of money for many. As a manufacturer, we are trying to drive down the costs to help.” And manufacturing is only one part of the chain – leaner distribution routes, that help get the technologies into the hands of farmers, are also needed.
Affordability requires suitable financial mechanisms that fit smallholder needs. Access to irrigation technology very much depends on costs and on farmers’ access to finance. Traditional ways of thinking about financing are mainly limited to micro-financing or bank loans. However, these do not always work, specifically for low income smallholder farmers. A recent development is finance modalities put in place by equipment suppliers themselves. However, these distributors also require their own financing and an ability to develop a viable business plan.
“The question of financing any business is complicated and involves risky loans”, said Toby Hammond, Futurepump.
“De-risking smallholder farmers is very important, as well as modalities to help farmers gain access to irrigation technologies. Irrigation is a really expensive venture and requires a holistic approach that looks at the entire value chain and provides farmers with information on what is available”, said Onyaole Patience Koku , Replenish Farms in Nigeria & Global Farmers Network member.
There are various ways that the public and the private sectors can work together. Important are holistic approaches that tackle challenges in the whole irrigation supply chain, financing for smallholders as well as bolstering output markets and agricultural value chains.
“We realize that to make that investment sustainable we need to go upstream and downstream. This includes for example making equipment and inputs accessible to producers, making sure that they have the technical capacity to use it as well as to engaging downstream at the transformation level,” said Richard Colback, International Finance Corporation (IFC).
De-risking through blended finance is a promising approach. Here, relatively small amounts of donor funds are used to mitigate specific investments risk. This allows private actors to pioneer new business models or new innovations with the aim of commercialization over time. However, care is required – the intervention must not distort the market, there must be an economic rationale, and the private sector should not be crowded out.
“IFC has put 1.2 billion USD out in blended finance over the past 10 years. The blended funds are used to test a proof of concept and/or to provide guarantees to the banks, e.g. cover potential losses in exchange of lower interest rates for farmers. This is to prove that the market makes sense”. “It is a really disciplined approach, to take small amounts of money to take some of the risk off the table, to try and do some things that we wouldn’t otherwise be able to do”, shared Richard Colback, IFC.
Subsidies could provide an interesting avenue, particularly when targeted to reach specific groups, but need to be carefully considered and implemented. Some projects in Cameroon, for example provide partial subsidies, supporting farmers while also ensuring their ownership of irrigation development. However subsidy schemes also entail some risks, for example the risk of capture by wealthier and well-connected farmers.
“‘Smart subsidies’ need to be very well designed and carefully thought through if we go that way”, said Toby Hammond, Futurepump
Also key to FLI development is ensuring that women and other marginalized groups have equal access to irrigation. Gender equity and social inclusion demands that gender is mainstreamed in policies supporting FLI development, that the customer profiles of the most vulnerable are understood and adapted financing schemes put in place, and that the success of tailored finance modalities or subsidies targeting the most vulnerable are evaluated.
Accelerating FLI development will require not only holistic approaches but also strong partnerships between implementing partners given that each plays a distinct role in facilitating access to irrigation and support the enabling environment. A combination of multi stakeholder dialogues to overcome systemic barriers and an intentional network that brings the FLI community together to share stories and ideas, could further advance FLI acceleration in the global south.
*This blog has been developed based on a discussion among implementers in the World Water Week session “Operationalizing farmer-led irrigation: implementers dialogue” held August 26th, 2020 with the International Water Management Institute(IWMI), the Water Global Practice (GP) of the World Bank, Daugherty Water for Food Global Institute (DWFI), the Global Water Partnership and the Water Youth Network.