Water for a food-secure world Innovative Agricultural Water Management Investment Opportunities:...

Water for a food-secure world

Innovative Agricultural Water Management Investment

Opportunities:Towards a New Generation of IFAD

AWM ProgramsDouglas J. Merrey, ConsultantAWM Workshop, Addis Ababa, Ethiopia

16 November 2012


Purpose

Assess range of AWM investment opportunities

Propose potential new AWM investment opportunities for IFAD to consider, and why

Water for a food-secure worldWater for a food-secure world

Background IFAD striving to be a “learning organization”

Policy & emphasis—innovation and scaling out

BUT reality is different 2010 evaluation questioned innovation capacity Most IFAD AWM investments traditional public

infrastructure Multiple phases of the same type of project COSOPs never mention AWM innovations

Continuity is defensible But our research shows same errors repeated

Not much learning!


Grab the Opportunities• Pipeline: massive

increase IFAD AWM investments

• Opportunity to achieve own goal of innovation & scaling up-out

• Opportunity for targeted investments for equity & poverty reduction

• IFAD could become a leader not a follower

KEY ROLES CONSULTANTS & PARTNERS!


AgWater Solutions Project

Financed by Bill & Melinda Gates Foundation (BMGF)

Challenged researchers to go beyond usual list of general recommendations Provide real data on

potential: number of beneficiaries, value added, & business plans


The AgWater Solutions Project

A three-year project, commenced in 2009.

Implemented in 5 countries in sub-Saharan Africa and 2 states in India

AWM solutions identified through broad partnership of organizations and institutions and in consultation with stakeholders.

The AgWater Solutions Project aims to improve the livelihoods of smallholder farmers in sub-Saharan Africa and South Asia through agricultural water management (AWM) solutions.


Identifying AWM Solutions:

Water within the larger context of rural livelihoods

IMPROVED LIVELIHOODS

Backward Linkages(Inputs)

Forward Linkages(Ag Products/Markets)

Resource/Livelihoodsituation

ExternalityManagement

PROFITABILITYOF AWM SOLUTIONS

POLICIES/INSTITUTIONS

ACCESS

An AWM solution is any measure, including technologies, products and practices, that increases or improves AWM knowledge, policies and financing and…

• Contributes to smallholder livelihoods• Benefits women and men• Cost-effective• Suitable for out-scaling• Addresses resource sustainability


Other Sources of information on New Investment Opportunities

AgWater Solutions Project (http://awm-solutions.iwmi.org/home.aspx) Tools, business plans, analyses – 5 countries

Other recent IWMI research, most with partners Water storage options

Spate Irrigation Network (www.spate-irrigation.org) Multiple Use Water – MUS group (www.musgroup.net) IFAD: INNOWAT (http://

www.ifad.org/english/water/innowat/index.htm) IWMI’s results-IFAD-supported project ,AWM in ‘Challenging

Contexts’ http://challengingcontextawm.iwmi.org/Investment Guidelines coming soon—source for this presentation

http://awm-solutions.iwmi.org/home.aspx

http://awm-solutions.iwmi.org/home.aspx

http://www.spate-irrigation.org/

http://www.musgroup.net/

http://www.ifad.org/english/water/innowat/index.htm

http://www.ifad.org/english/water/innowat/index.htm

http://challengingcontextawm.iwmi.org/

http://challengingcontextawm.iwmi.org/


Targeted investments to address AWM constraints & enhance agricultural sector's potential

4 solution pathways proposed

Improved livelihoods of smallholder farmers

Increase access to water

Rainwater harvesting• Create suitability maps• Show farmers the benefits• Garner local support• Offer smart subsidies• Provide technical support

Shallow groundwater• Map groundwater resources• Develop affordable drilling• Raise awareness and create

demand• Monitor environmental risks

Small reservoirs• Reduce investment costs• Pilot new management

approaches• Acknowledge multiple uses

Catalyze smallholder value chains

Innovative financing mechanisms• Pilot financial instruments• Support rental markets• Explore irrigation service

providers’ model• Link specialist financing to

existing programmes• Encourage women to own

equipment

Helping farmers buy equipment and become profitable• Provide better information• Educate about marketing• Provide crop storage

facilities• Promote ‘try-before-you-buy

scheme’• Use networks to disseminate

information

Create policy synergies between sectors

Addressing the influence of external sector policies• Align energy, import and

water policies• Develop alternative energy

sources• Privatize procurement and

marketing of irrigation equipment

• Review tax policies and import duties

Take a watershed perspective

Managing social and environmental impacts• Consider multiple AWM

investments• Develop systems to promote

cooperation• Improve evaluation of

investments• View impacts in broad

context

1 2 43


Current Types IFAD Investments

Technology [Community-managed]

Evaluation

Diversion from streams-gravity

SSA potential 20m ha, 113m pop., $14B/yearSensitive to cost, crop prices; protect watershed, lack storage. Mixed de facto results

Small reservoirs SSA potential 22m ha, 369m pop., $20B/yearHigh costs, many issues reduce performance, potential negative health impacts; but these are solvable

Inland valleys-wetlands SSA potential 10m ha, 53m pop., $7B/year. Irrigated rice in WCA, dry season vegetables ESASensitive: limited runoff, high costs, vulnerable to climate change; land tenure issues


Other Potential Investments

Technology Evaluation

RWH in-situ: Conservation Agric., zai pits

SSA potential 15m ha, 146m pop., $8.4B/year for CA.Can stabilize production & increase staple prod. Labor-cost issue, vulnerable to drought, few successful programs at scale [Ethiopia exception]

RWH ex-situ: Capture runoff in small ponds

Positive outcomes farm ponds. No figures on potential. Going to scale based on quotas undermines quality; requires subsidies

Spate irrigation Moderate potential in dry areas, improve traditional = opportunity. Vulnerable to rain variability, low returns.www.spate-irrigation.org supported by IFAD

http://www.spate-irrigation.org/


The Potential of PUMPSTechnology – Pumps Evaluation

Treadle pumps Low cost capital & maintenance; high potential but often not attractive, constrained by depth of water; some success e.g. www.kickstart.org, www.ideorg.org; Invest in value chain plus smart vouchers

Diesel/petrol Est. 1m users now; potential believed highAdvantages: capacity, portableProblems: cost, unreliable spares & fuel; threat to aquifersInvest in value chain plus smart vouchers -- – equipment, spares, service [women-owned businesses possible]

Electric Potentially cheaper than diesel, need to expand electric supply. India example—very positive outcomes. Invest in rural electrification

Solar High initial costs but robust, long lifeNot read to scale but pilot test opportunities

http://www.kickstart.org/

http://www.ideorg.org/


Manual Drilling of Aquifers• Basic low-cost business

opportunity – linked to pump industry

• Can be women-owned businesses

• Common in India; pilot tested in Ethiopia; UNICEF mapping aquifers SSA

• IFAD can promote business


Keys to Success: Pumps, Drip & Sprinkle

POLICY: Support developing sustainable agro-industry, NOT “uptake” of specific technology Other sectors’ policies: import, tax, exchange rates, credit/

micro-credit, electricity Input and output markets -- value chains

Potential for smart targeting to women or cash-poor

THINK OUTSIDE THE BOX


India > 50% of the irrigated area watered by smallholder pumpsAfrica - Smallholder AWM reaches more farmers than public irrigation

Smallholder AWM: A vibrant and growing sector: Build on existing trends

Agricultural Water Management in Ghana

Source: estimates based on farmer surveys under this project

No. of farmers Irrigated area (ha.)0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

Public irrigation schemes Small reservoirs Motorized pumpsBuckets, watering cans Treadle pumps


Drip irrigation

• Failures projects supplying drip kits

• Opportunities = promote range of technologies & support services through private agro-business development [applies to pumps] – can be COMESA for economies of scale


Investment costs of irrigation technologies in sub-Saharan Africa

Investment costs

(USD/ha)

O&M costs (USD/year)

Financed by

Buckets <50 <10 Farmers Motor pumps 400 330 Farmers Treadle pumps 350 <10 NGOs & Farmers Public canal irrigation 10,000 Often not charged, but frequent

rehabilitations needed Gov’t & Donors

Sector largely overlooked by investors


Invest in value chain improvements: increase access• Costs and financing constrain farmers. • Programs do not target beneficiaries according to their needs. • Women are underrepresented in AWM technology use.

Irrigation Service Providers:

Local entrepreneur owns 1+ pumps.Paid per hour for irrigation.

Benefits: • Incomes for entrepreneurs.• Income from dry season crops for

farmers.


Investments in a watershed perspectiveExamining a range of impacts and the institutional capacity to manage trade-offs could help improve the benefits from future AWM investments.

Mkindo Watershed, Tanzania: Participatory impact assessment of AWM solutions

Social Impacts Environmental Impacts

Technology Equity Gender Poverty Reduction

Water Quality

Water Quantity

Natural Resources

Gravity based furrow system for paddy rice production

+/- - + - - -

Diesel pumps – irrigating from rivers +/- + + - - -

Livestock watering ponds + + + NA + +

Livestock watering canal - + + NA NA -

Large scale irrigation for cash crop production - NA Unclear - - -


Water StorageMultiple options, critical issue as adaptation to

climate variability & change


Multiple Use Water Services (MUS) Applies to all water

management technologies “irrigation plus” other

uses “Domestic plus”

agriculture Community demand-

driven process substantial increase benefits, sustainability

Cattle need to drink too!


Water will be used as needed regardless of design


Supportive Institutional Structures – All Levels Existing policies & institutions not designed to

support alternative modes of AWM development IFAD should engage in multi-stakeholder policy dialogue

for reform Bring in business community, other sectors

Local government-sponsored organizations often weak Experience shows IFAD & partners need new approaches

to empowering local communities Engage users from earliest stages, build capacity, & share

responsibility


Conclusions Opportunity: IFAD can achieve innovation & AWM

out-scaling goals Opportunity: Improve existing AWM investments Opportunity: New AWM investment areas

Value chains to scale up access to low cost technologies Build on farmer-driven market-based innovations

increase access, support services, smart targeting MUS – applies to all technologies, increases sustainability

& impacts on livelihoods

Watershed perspective Water storage alternatives


Critical Advice

Policy & institutional reform are critical to success! Bring other sectors into policy dialogue Involve wide range of key stakeholders for policy changes

Thank you!

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