1. Water for a food-secure world Innovative Agricultural Water Management Investment Opportunities: Towards a New Generation of IFAD AWM Programs Douglas J. Merrey, Consultant AWM Workshop, Addis Ababa, Ethiopia 16 November 2012

2. Water for a food-secure world Purpose  Assess range of AWM investment opportunities  Propose potential new AWM investment opportunities for IFAD to consider, and why

3. Water 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!

4. Water for a food-secure world 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!

5. Water for a food-secure world 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

6. Water for a food-secure world 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.

7. Water for a food-secure world Identifying AWM Solutions: Water within the larger context of rural livelihoods IMPROVED LIVELIHOODS Backward Linkages (Inputs) Forward Linkages (Ag Products/Markets) Resource/Livelihood situation Externality Management PROFITABILITY OF 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

8. Water for a food-secure world Other Sources of information on New Investment Opportunities  AgWater Solutions Project (http://awm- solutions.iwmi.org/home.aspx)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)www.spate-irrigation.org  Multiple Use Water – MUS group (www.musgroup.net)www.musgroup.net  IFAD: INNOWAT (http://www.ifad.org/english/water/innowat/index.htm)http://www.ifad.org/english/water/innowat/index.htm  IWMI’s results-IFAD-supported project,AWM in ‘Challenging Contexts’ http://challengingcontextawm.iwmi.org/http://challengingcontextawm.iwmi.org/ Investment Guidelines coming soon—source for this presentation

9. Water for a food-secure world 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

10. Water for a food-secure world Current Types IFAD Investments Technology [Community- managed] Evaluation Diversion from streams- gravity SSA potential 20m ha, 113m pop., $14B/year Sensitive to cost, crop prices; protect watershed, lack storage. Mixed de facto results Small reservoirs SSA potential 22m ha, 369m pop., $20B/year High costs, many issues reduce performance, potential negative health impacts; but these are solvable Inland valleys-wetlandsSSA potential 10m ha, 53m pop., $7B/year. Irrigated rice in WCA, dry season vegetables ESA Sensitive: limited runoff, high costs, vulnerable to climate change; land tenure issues

11. Water for a food-secure world Other Potential Investments TechnologyEvaluation 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 irrigationModerate potential in dry areas, improve traditional = opportunity. Vulnerable to rain variability, low returns. www.spate-irrigation.orgwww.spate-irrigation.org supported by IFAD

12. Water for a food-secure world The Potential of PUMPS Technology – PumpsEvaluation 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 voucherswww.kickstart.orgwww.ideorg.org Diesel/petrol Est. 1m users now; potential believed high Advantages: capacity, portable Problems: cost, unreliable spares & fuel; threat to aquifers Invest 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 SolarHigh initial costs but robust, long life Not read to scale but pilot test opportunities

13. Water for a food-secure world 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

14. Water for a food-secure world 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

15. Water for a food-secure world India > 50% of the irrigated area watered by smallholder pumps Africa - 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

16. Water for a food-secure world 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

17. Water for a food-secure world Investment costs of irrigation technologies in sub-Saharan Africa Sector largely overlooked by investors

18. Water for a food-secure world 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.

19. Water for a food-secure world Investments in a watershed perspective Examining 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 ImpactsEnvironmental Impacts TechnologyEquityGender 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 - Large scale irrigation for cash crop production -NAUnclear---

20. Water for a food-secure world Water Storage Multiple options, critical issue as adaptation to climate variability & change

21. Water for a food-secure world 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!

22. Water for a food-secure world Water will be used as needed regardless of design

23. Water for a food-secure world 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

24. Water for a food-secure world 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

25. Water for a food-secure world 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!