NOTES AGRICULTURAL & RURAL DEVELOPMENT 37041 Investing In Smallholder Irrigation BY: THE WATER FOR FOOD TEAM ISSUE 16 JUNE In many developing countries, irrigation is counted on to communal schemes. To promote expansion of small- 2006 increase production, reduce reliance on unpredictable holder irrigation, poor farmers must have access to rainfall, and provide food security, income, and employ- cost-effective technologies that provide a rapid return ment to poor farmers. Large schemes, which the World on investment, a reliable and quality supply of water Bank financed for decades, have often lacked sustain- and other inputs, land for expansion, and markets to ability; frequently used to produce uncompetitive cereals absorb increased production. for import substitution, such large schemes typically suf- fer from the inability of government or parastatals to Potential Areas of Investment maintain the infrastructure. Smaller, communal schemes Throughout the developing world, many smallholders work well in many countries but can be plagued by col- produce vegetables on irrigated plots during the dry lective action problems, although the basic rules for suc- season as a hedge against a rainy season crop failure cess are well documented (Ostrom 1992). Elsewhere, and as a source of cash income and food. These plots there is considerable scope for the expansion of small, may be very small: surveys have shown that garden privately owned pumping technologies that benefit size rarely exceeds 0.1 hectares and is often less than small farmers, particularly for the production of high- 0.05 hectares (500 square meters). With nonmecha- value crops such as horticulture. nized systems using ropes, buckets, and watering cans, irrigation of even such small areas can be Smallholder irrigated horticulture has proven to be a extremely labor intensive. The labor constraint often viable and attractive option for poor farmers in devel- limits increased production simply because the farm oping countries. Returns from intensive irrigated hor- family lacks the time and energy to provide sufficient ticulture, even on tiny plots, can greatly exceed water for the crops. Moreover, the distance to water returns from rainfed cereals production. Private own- points has been shown to decrease the likelihood of ership of simple pumping technologies has avoided girls attending school because they are often respon- collective action problems related to larger public or sible for collecting water (WHO 2003). The first hurdle to expanded smallholder irrigation, therefore, is to demonstrate and provide access to labor-saving technologies for lifting and distributing water. Mechanized technologies such as small gaso- line or diesel pumpsets often exceed the means of poor farmers--both in terms of investment cost ($300 to $500) and of operating costs of fuel, oil, and spare parts. Moreover, the small size of many gardens may preclude economical use of a motorized pump. The treadle pump, on the other hand, has been shown to provide an economically viable solution for water lift- ing that is within the financial means of smallholders in Africa and Asia, and may allow a farmer to irrigate 0.5 hectares using only family labor and investing US$50­$100. Scaling up from traditional systems to treadle pumps and, further, to motorized irrigation systems requires careful thought and an incremental approach (Box 1). Box 1: Scaling Up with Improved Technology Takes Time Economic analysis in Niger has found that for plot sizes less than 0.69 hectares, treadle pumps are more profitable than small motorized pumps, but for larger plot sizes the motorized option becomes economi- cally superior (World Bank 2001). To make best use of a motorized pump, an average farmer would need immediately to increase the size of his or her garden by 14 times (for example, from 0.05 hectares to 0.7 hectares) to ensure viability.This transition may easily surpass the technical and management capacity of the farmer, who will require more labor, inputs, and markets for the produce, which helps explain why many credit-based motorized pump-promotion projects for smallholders fail. Instead, by starting small and increasing incrementally, some treadle pump adopters have managed to graduate to mechanized technolo- gies. The following scenario for scaling up has proven successful, minimizing risk for smallholders: · Year 0: A farmer has a hand-dug well with a rudimentary rope-and-bucket gravity irrigation distribution sys- · Year 1: The farmer buys a treadle pump but keeps the hand-dug well.The gardener realizes productivity gains tem.This may be marginally profitable but is highly labor intensive. · Year 2: The drilled tubewell,treadle pump,and rudimentary gravity irrigation distribution system permit a large but may observe that the water-lifting capacity now exceeds the well capacity and decides to improve the well. · Year 3: As garden size expands and the length of the distribution canals increase, the gardener improves the expansion in the size of the garden, because neither the amount of water nor the time to lift it is a constraint. · Years 4­6: Extension of the PVC system again allows an increase in garden size.With a second well and pump, distribution system with buried PVC pipes. · Year 7: A motorized pump is added to the system, and manual pumps provide reliable back-up during fuel the distribution system is again expanded. shortages or breakdowns. Source: Jon Naugel, Enterprise Works, and Daniel Sellen, World Bank. BENEFITS artisans are closer and more accountable for quality and repair. The quality and quantity of food for local and Smallholder irrigated horticulture can provide significant household consumption is also important, and irrigated returns to farmers and increase local manufacturing horticulture addresses household food security con- capacity while creating employment. Surveys have cerns. Many of these benefits are perceived by women shown that many farmers increase their land under cul- farmers, who are able to augment garden production. tivation by three times within two years after the pur- Household drip irrigation systems, supplied from period- chase of a treadle pump, more than doubling their ically filled buckets or drums, often with a treadle pump, annual incomes. In West Africa, projects implemented to water household gardens or small plots of vegetables by EnterpriseWorks Worldwide in Senegal, Mali, Niger, or fruit trees are particularly important for women as Benin, Burkina Faso, Côte d'Ivoire, and Ghana have pro- well as men. moted private sector sales of more than 8,000 treadle pumps and more than 1,000 low-cost tubewells. More important, these technologies have resulted in higher POLICY AND IMPLEMENTATION incomes for more than 80 small fabrication workshops and thousands of small-scale gardeners. The annual Several policy and resources conditions must be met increase in income for gardeners varies widely between for successful implementation of smallholder irrigated countries and within countries, but it ranges from $290 horticulture. in Niger to $584 in Senegal. Access to adequate irrigable land Benefits do not stop at the farm gate. When locally Improved water-lifting technologies have a higher dis- made treadle pumps are used, the artisan sector may be charge than traditional methods, and time saved in irri- stimulated. Small metal shops learn new skills and devel- gating may be used to expand surface area if suitable op their ability to solve local problems. Local products land is available. Land tenure systems are a potential may be preferred to externally produced pumps, as the impediment to the expansion of irrigated horticulture; 2 because, if farmers do not own the land, they will be must be present, particularly since horticultural products reluctant to invest in permanent improvements such as are perishable. Price cycles often accompany horticultur- tubewells. Conflicting land use can also be a problem, al production, which may require additional investment especially when dry season irrigation encroaches on land in value-added production (such as drying or better traditionally used by herders. storage) to smooth out supply. Of course, access to mar- ket information is also important. Existence of sufficient water of suitable quality Expanded irrigated horticulture requires adequate sup- plies of ground or surface water to meet the require- LESSONS LEARNED ments of the crops being grown because the most pro- Two important lessons are reviewed here: development ductive smallholder irrigation is performed during the of supply chains for sustainable impact and the impor- dry season (when insects and plant diseases are scarce tance of a market-led approach for financing technology and when rainfed cereals production does not compete acquisition. for labor). Irrigation water is most economical if subsur- face water supplies are within 7 meters of the surface or Supply chain development if surface water supplies are within 50 meters of the Low-cost productive technologies must be available to plants. Water quality is also important because salinity smallholders in terms of both location and price and must can become a major problem, especially in arid climates, correspond to their needs. A variety of ways of providing even when concentrations of salts in irrigation water are relatively low. Technical advisory services would then be smallholders with access to these technologies have been needed to advise on selecting salt-tolerant crop varieties used, ranging from importing treadle pumps to manufac- and saline irrigation practices. turing items locally (Box 2). For market-driven sustainable development to occur, all parties in the supply chain must Availability of ample labor supply make a profit. In the case of treadle pumps, tubewells, Although rural household labor is frequently in short supply during the rainy season, when farmers focus on Box 2: Developing a Supply Chain staple crops, it is usually relatively abundant during the for Pumps dry season when irrigated horticultural activities are per- formed. Labor productivity can be increased significant- Certain principles are generally accepted as key ly through higher yields and expanded irrigated surface to establishing a viable supply chain, including the areas through the use of mechanized water lifting, following: piped distribution systems, and improved surface irriga- · Private sector actors, motivated by profit, are tion or drip irrigation systems. · Extremely judicious use of subsidies can pro- more successful than public sector entities. Availability of nonirrigation inputs ·· All actors in the chain need to make a profit. mote initial introduction. Fertilizer, seed, and pesticides need to be adequately supplied by the commercial sector on the basis of mar- The development agent must play a facilitator's ket prices. If not, farmers produce their own seed, lead- role in developing a viable supply chain but must ing to reduction in yields as seed quality deteriorates. not compromise future sustainability by per- Vegetable seeds adapted to the prevailing environmen- forming functions that the main actors in the tal conditions are an important input that is frequently There are two schools of thought for the best chain cannot assume. lacking. Subsidized inputs, typically fertilizer, have been shown to make these items less accessible to smallhold- design of a supply chain:decentralized manufacture ers, because these benefits tend to be captured by larg- (small workshops close to the markets) and cen- er farmers, creating scarcity. tralized mass manufacture (several large manufac- turers with a distribution network). Both methods Market conditions have advantages and disadvantages.The choice will depend both on the project planners' goals and on Market outlets for irrigated production are imperative the available infrastructure. for a successful smallholder irrigation subsector. Source: World Bank 2003. Proximity to markets or reliable transportation linkages 3 and improved piped water distribution systems, the · Consider simple technologies such as treadle pumps manufacturers, installers, and the gardeners all benefit. and drip irrigation kits. These self-select for poor Treadle pump manufacturers earn $15 to $25 profit per households. pump; tubewell installers earn $12 to $18 per well; and · Ensure that a minimum set of resource and market the plumbers installing buried PVC pipe distribution sys- conditions are satisfied before promoting irrigation. tems earn roughly $0.20 per meter of pipe installed. · Develop supply chains that are dominated by private entrepreneurs such as pump manufacturers and Financing technology for repair shops. a market-led approach · Rethink the definition of smallholder-irrigated agricul- In many countries, the uptake of technologies by subsis- ture in view of market gardening. Many farmers, par- tence gardeners is hindered by the lack of institutions ticularly the poorest, irrigate plots smaller than one- that provide rural finance. Although the development of tenth of a hectare. low-cost technologies has reduced up-front costs, farm- · Recognize that rapid introduction of mechanized tech- ers typically require financial assistance, ideally through nologies can easily overwhelm a poor smallholder in a pump supplier credit or other commercially viable cred- terms of capacity. Scaling up to mechanized pumps has it mechanisms. Subsidized programs are risky because of been demonstrated successfully but may take time. market distortions, and should be investigated only if · Make sure there are markets for the outputs, or help there are no rural finance institutions or it is felt that cost create them, to ensure that increased production is reduction is required for a "demonstration effect" profitable. where pumps are unknown. Therefore, coordination among donors in the irrigation sector is essential for REFERENCES CITED mutual understanding of the long-term benefits of Ostrom, Elinor. 1992. Crafting Institutions for Self-Governing encouraging farmers to invest in a technology that will Irrigation Systems. San Francisco: Institute for Contemporary pay for itself in its first season of use. Poorly managed Studies Press. credit programs hurt the very people they are designed to help in the long term. Instead of developing sustain- Shah, T., M. Alam, M. D. Kumar, R. K. Nagar, and M. Singh. 2000. "Pedaling Out of Poverty: Social Impact of a Manual able local capacity, these programs leave smallholders Irrigation Technology in South Asia." International Water dependent on foreign aid and waiting for a gift rather Management Institute Research Report No. 45, 2000, than investing in their own future. However, the small- Colombo, Sri Lanka. holder market approach only works well when the tech- WHO (World Health Organization). 2003. Right to Water. Health nology being promoted has a short payback period (one and Human Rights Publication series, No. 3. Geneva. or two seasons), and the initial cash payment is within the smallholder's reach. World Bank. 2001. "Implementation Completion Report for Private Irrigation Promotion Pilot Project (IDA 2707 NIR)." RECOMMENDATIONS FOR July, World Bank, Washington, DC. PRACTITIONERS --------. 2003. "Treadle Pump Supply Chain Workshop Report." Water and Sanitation Program-Africa. In French. Available · Use privately owned technologies to avoid collective online at http://wsp.org/08_Region_output.asp?Region=Africa. action problems and reliance on government assis- World Bank. 2005. Shaping the Future of Water for Agriculture: tance. This increases the likelihood that irrigation A Sourcebook for Investment in Agricultural Water assets will be maintained. Management. Washington, DC: World Bank. This Note was prepared by Jon Naugle of EnterpriseWorks and Daniel Sellen, Senior Agriculture Economist at the World Bank. It was revised by Salah Darghouth, Water Adviser for the Agriculture and Rural Development Department (ARD) of the World Bank, and Ariel Dinar, Lead Economist in ARD at the World Bank--both part of the Water For Food Team. The note is based on Investment Note 3.3 in the larger volume Shaping the Future of Water for Agriculture: A Sourcebook for Investment in Agricultural Water Management. The book documents a range of solutions and good practices from World Bank and worldwide experience, concentrating on investments in policy and institutional reforms in technology and management to improve water productivity and farming profitability. You can down- load a copy of the full report at www.worldbank.org/rural or email ard@worldbank.org. THEWORLDBANK 1818 H Street. NW Washington, DC 20433 www.worldbank.org/rural