Innovation Lab For Small Scale Irrigation

Innovation Lab For Small Scale Irrigation

Marianne Gadeberg

Ethiopian dairy cooperatives use irrigation for forage production, increasing farmers’ incomes and resilience

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by Aberra Adie, Research Officer, International Livestock Research Institute (ILRI)

“Our collaboration with the ILSSI project has enabled us to increase our milk production and sales considerably,” said Alemu Demoze, the chairman of the Genet Lerobit Dairy Cooperative in Bahir Dar Zuria district, Ethiopia.  

Alemu Demoze, chairman of Genet Lerobit Dairy Cooperative. (Photo credit: ILRI/Fikadu Tessema).

Irrigated fodder production is a recent development in Ethiopia. But now, after years of collaboration with the Feed the Future Innovation Lab for Small Scale Irrigation (ILSSI), both individual farmers and dairy cooperatives have started using small scale irrigation techniques and new forage varieties to produce fodder year-round for livestock feeding. ILSSI has provided technical support to the dairy cooperatives in its project sites, which has helped these entities to establish a new milk-collection center, a forage seed store, and sales shops.

A new milk-collection center and forage seed sales shop, constructed by the Genet Lerobit Dairy Cooperative (Photo credit: ILRI/Fikadu Tessema).

Cooperatives boost incomes and value chains

Alemu explained that membership numbers in the Genet Lerobit Dairy Cooperative have increased from 57 members 3 years ago to 180 now, due to the growing interest in irrigated fodder production and the market opportunities created for fluid milk:

“Currently, we are supplying about 300 liters of milk daily at a price of 22 birr (US$0.50) per liter to a milk processor in Bahir Dar town. This volume of milk is up by more than 50 percent from what we used to supply few years back.”

The cooperative’s engagement in forage seed multiplication and marketing is expected to provide an additional source of income for its members, while also strengthening the fodder value chain in the communities.

“We have allocated 1.5 hectares of dedicated land for forage seed multiplication and also formed farmer interest groups, which showed interest in multiplying forage seeds and planting materials on their own land and supply to the cooperative,” said Alemu.

According to him, the cooperative is planning to use both individual farms and the land secured through the cooperative as a source of forage seed and planting materials.

Alemu Demoze (right) standing in front of the newly constructed milk-collection center and feed shops (Photo Credit: ILRI/Fikadu Tessema).

Explaining further the cooperative’s preparations to strengthen the irrigated fodder value chain, he added:

“With the support we received from ILSSI, we have constructed a forage seed store, milk-collection and processing rooms, as well as sales shops. These facilities will considerably increase our market share and incomes in the near future.”

The cooperative’s management believes they are now in a good position to increase dairy production in the community, using irrigated fodder technologies and new market opportunities created through the collaboration with ILSSI and other development actors.

“We are in discussion with the local extension office so that they can support us in certifying the forage seeds that we plan to produce this season. We are also in discussion with the livestock and fisheries sector development project to create market linkages for forage seeds,” Alemu explained.

Providing protection against COVID-19 disruptions

Habebo Dairy Cooperative, located in the Lemo district of Ethiopia’s Southern region, is another entity engaged in irrigated fodder development. The cooperative provides services to its members by collecting fluid milk and processing it into butter and cheese, which allows the cooperative members to sell these higher-value products to consumers. Over the past three years, the support the cooperative members received from ILSSI enabled them to grow their capacity and become more resilient to market fluctuations.

Aberash Tamre, chairman of Habebo Dairy Cooperative (Photo credit: ILRI/Tigist German).

“Our collaboration with ILSSI came at a critical time for us,” said Aberash Tamire, the chairwomen of the cooperative. “When the COVID-19 pandemic disrupted market chains, we were able to cope with problem by processing our milk into shelf-stable and easily transportable products, such as butter and cheese. Other farmers who didn’t have the capacity to process milk were seriously affected by the movement restrictions and market disruptions for fluid milk.”

This cooperative has managed to construct a well-designed milk processing room, a forage seed store, and sales shops in their compound with a grant received from ILSSI.

Habebo Dairy Cooperative management members in their newly set up milk-collection and shop center (Photo Credit: ILRI/Tigist German).

“Our members are highly indebted to the support provided to grow our capacity. This collaboration with ILSSI has also motivated other farmers to apply for cooperative membership, and currently the total membership has reached 220 households, which is up by 40 percent compared to two years ago. Some of the newcomers recently bought crossbred cows and joined us,” explained Aberash.

Tackling land and water challenges

In the areas where these two dairy cooperatives are located, land remains a major constraint to agricultural productivity. There is a lot of competition for land to produce food crops and fodder. However, adoption of irrigated fodder production has helped ease the competition for land, as farmers are now able to produce fodder year-round on a small plot of land.

In addition, ILSSI is working with national partners to provide alternative forage varieties that can be grown with minimum water and nutrient input and at the same time supply the needed fodder for farmers’ livestock. Adoption of such new varieties would further ease the pressure on natural resources, and cooperative members are currently participating in the evaluation of the new forage varieties for wider scaling.

Finally, ILSSI has planned a series of training programs to build the capacity of the cooperatives in forage seed multiplication and marketing businesses. The impact of the ILSSI intervention is now visible in the project sites:

“We are very happy at the moment because we are making tangible progress in improving our income and livelihoods,” concluded Aberash.

Supporting solar irrigation companies to break down markets and lift up smallholder farmers in Ghana

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byThai Thi Minh, Senior Researcher, and Abena Ofosu, Senior Research Officer, Innovation Scaling, IWMI

In the Upper East region of Ghana, most smallholder farmers still rely on watering cans and buckets for irrigating the tomato, pepper, onion, and other vegetable crops they grow during the dry season. This type of irrigation is both labor intensive and time consuming, while more advanced irrigation technologies, such as motorized pumps, could boost farmers’ incomes, improve their health and resilience, and increase the supply of nutritious foods.

In the past, farmers in this area have used both electric irrigation pumps, running off the electric grid when available, and petrol- and diesel-powered motorized pumps, but both options are costly. Now, solar-powered irrigation pumps are emerging as an attractive, affordable alternative, but these kinds of pumps are not yet readily available in the Upper East region.

Solar-powered irrigation pumps are emerging as an attractive, affordable solution. Photo: Thai Thi Minh/IWMI.

That’s why the International Water Management Institute (IWMI), through the USAID-supported Africa Research in Sustainable Intensification for the Next Generation (Africa RISING) and the Feed the Future Innovation Lab for Small Scale Irrigation (ILSSI), has been supporting irrigation equipment suppliers in Ghana to expand into this new market, including by breaking the market down into distinct segments of farmers that could access and benefit from solar-powered irrigation pumps in different ways.

Market segmentation for solar-powered irrigation pumps

Ghana’s Upper East region offers an attractive market for companies selling solar-powered irrigation pumps, with opportunities for them to establish sales outlets, expand customer bases, and reach and improve profitability by making their products accessible at the doorsteps of farmers.

These opportunities were discussed at the recently held third meeting of a multi-stakeholder dialogue platform in Ghana, established by IWMI and ILSSI to bring together stakeholders from government, research organizations, irrigation equipment suppliers, financial services, and value chain actors to innovate and facilitate the expansion of small scale irrigation.

Stakeholders from government, research organizations, irrigation equipment suppliers, financial services, and value chain actors met to discuss opportunities and challenges. Photo: Thai Thi Minh/IWMI.

Precise market segmentation is key for companies expanding into new markets. It allows them to plan for and use diverse business models to reach different and diverse groups of farmers. However, few solar pump companies have assessed and targeted market segments as they have established operations in Ghana.

IWMI scientists therefore undertook a market segmentation exercise within the Upper East region, basing it on farmers’ access to land, water, irrigation and production arrangements, financial capital and potential, and product preferences. As a result, four market segments were identified, namely resource-rich individual farmers, resource-limited individual farmers, farmer groups, and mobile farmers who during the dry season move from their residential area to irrigate fields close to publicly funded irrigation schemes.

Understanding these segments is useful for companies because each group of potential customers has distinct options and needs, particularly regarding what type of pump is suitable for them, whether they have capital for the investment on hand, and whether their preference is to make a one-time payment or to access some type of financing.

Creating opportunities for companies and farmers

During the meeting, held on held on May 4, 2021, Osman Sahanoom Kulendi, managing director of Pumptech, a distributor of solar-powered irrigation pumps, shared insights into how they have segmented the market for their range of LORENTZ PS2 solar irrigation pumps, which they offer bundled with what they call PAY-OWN financing, a type of asset-based financing that can give farmers access to solar pumps without the usual collateral or credit history required for a loan.

Pumptech’s findings build on IWMI’s initial assessment of the market segments in the region, and have been validated and refined through several events, organizing by IWMI, that brought together agricultural extension agents, farmers, community volunteers, traders, borehole dealers and pump repairers, researchers, and others from within the region.

Kulendi stressed an urgent need to explore the region’s market potential. He mentioned that establishing a sales and distribution network is one way to make solar-powered pumps accessible to farmers:

“We have been trying to set up an office here in the Upper East since last year. We have not done it yet because we had not explored the potential, especially in irrigation. But with the potential that we have explored since we visited places in the region [with IWMI], I bet you by the end of the year, we will have a physical presence here. IWMI has created this opportunity to bring us together to interact with you. We would also like to encourage you to bring more of us together again to realize our potential,” he said.

While smallholder farmers in the Upper East region are potential customers for solar-powered pumps, their interest will depend on the ease of access, user-friendliness of pumps, whether the pumps meet their needs and preferences, and whether they are economically attractive investments. The multi-stakeholder dialogues meetings, which are expected to continue over the coming years, are valuable for private sector companies to interact with each other and others in the sector, to facilitate linkages between actors, strengthen information exchange, and stimulate innovation.

Market segmentation benefits go beyond business

For private sector businesses, market segmentation helps identifying needs and interests of various groups, such as the segments identified above as well as for example women, youth, and persons with disabilities. With better market segmentation, companies can save time, while reducing cost and effort, when attempting to reach new customers in target markets. In this way, market segmentation indirectly contributes to economic growth in the agricultural sector due to the increase in use of mechanized irrigation technologies.

What’s more, market segmentation can help governments, practitioners, and irrigation equipment suppliers design products specifically targeting women. Such gender-sensitive product design might consider the various water-related roles and schedules of women farmers and could imply designing pumps that are portable, light, and easy to use for multiple purposes. Women farmers prefer solar technology that can be used not only for pumping water for irrigation, but also for livestock watering, and domestic and household hygiene activities. A well-segmented market also makes clear the need to design products that are within the income levels of the target groups, such as women.

In this way, segmenting markets to target women specifically could benefit women in various ways. It might, for example, allow women to access solar-powered irrigation pumps that could improve on-farm production and income, contribute to nutrition security within the household, and reduce the time women spend on irrigation.

Finally, market segmentation could help government and non-governmental organizations plan interventions, allocate resources, facilitate impact assessments, promote inclusive development, and obtain insights that can lead to best-fit innovations and better services for all Ghanaians.

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The multi-stakeholder dialogue meeting in Ghana was third in a series of events convening stakeholders from the small scale irrigation sector to discuss challenges and collaborate on collective solutions. It was followed by a similar meeting in Ethiopia, which was held on May 27, 2021, and co-convened by the Ethiopian Ministry of Agriculture, the International Water Management Institute (IWMI), and 2030 Water Resources Group. Reports on both events will be published soon.

The two-faced challenge of the credit constraints limiting smallholder farmers’ irrigation investments

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by Nicole Lefore, Director of Feed the Future Innovation Lab for Small Scale Irrigation (ILSSI), Bedru Balana, Research Fellow at the International Food Policy Research Institute (IFPRI), and Claudia Ringler, Deputy Director of Environment and Production Technology Division at IFPRI

Many smallholder farmers, especially women and other marginalized groups, face difficulty in accessing loans and other forms of credit. Such credit constraints are often considered a key barrier to adoption of mechanized agricultural technologies, such as small scale irrigation equipment.

So how can this challenge be overcome? A new study indicates that the solution might be more complex than previously assumed.

A challenge with two equally important causes

In the past, both research papers and policy guidance documents have advocated for improving the supply of credit to smallholder farmers. The argument is that smallholders face credit constraints on the supply side, meaning that not enough loans or credit schemes are available to them. Therefore, the argument goes, expanding the supply of loans or other forms of finance would unleash investment in irrigation technologies.

Based on this premise, the Feed the Future Innovation Lab for Small Scale Irrigation (ILSSI) has been exploring various affordable and accessible financing options to make loans more available to small scale irrigators, to particularly address these supply-side constraints to credit.

However, a more recent ILSSI study cautions against oversimplifying the solution to credit constraints, when looking to scale irrigation technologies. It has found that demand-side factors, that is, constraints related to the farmers’ own perception and context—such as their risk aversion, bad experiences with past loans, financial illiteracy, perceived high transaction costs, and their household’s labor supply shortages—might play an equally important role, effectively shaping the amount of credit that smallholder farmers are willing to take on, even if they had access.

Complementary solutions required

Using primary data from surveys in Ethiopia and Tanzania, scientists from the International Food Policy Research Institute (IFPRI) working with ILSSI analyzed both demand- and supply-side constraints to credit. The aims of the study were to identify the credit-constraint status of smallholder farmers, that is, whether farmers are unconstrained, supply-side constrained, or demand-side constrained and to assess gender-differentiated credit constraints.

Fig. 1. Supply- and demand-side credit constrained households.

The results showed that demand-side credit constraints are at least as important as supply-side factors. The message is that easing supply-side constraints alone—for example through lowering barriers to entry for credit—will be insufficient if demand-side constraints are not also addressed. Moreover, gendered credit constraints are also on the demand side – and women face additional challenges generating demand for credit as well as accessing credit.

Fig. 2. Supply- and demand-side factors to credit constraints.

These findings open a broader discussion of what it will truly take to improve farmers’ access to and use of credit and other financing mechanisms, which can support their uptake of small scale irrigation and other technologies. As men and women farmers increasingly desire to take on irrigation, credit will continue to be critical.

Scalable solutions in finance for irrigation will require closer understanding of the nature and sources of credit constraints. What is needed is both more targeted finance instruments, from loans to asset-based finance to insurance, and complementary interventions that address demand-side constraints, such as by improving financial literacy and mitigating perceived risks. Finally, gender-sensitive credit instruments and targeted activities are needed that will both increase women’s interest in and access to credit products.

Further reading

Innovating for financial inclusion: Strengthening asset-based financing for women farmers

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by Thai Thi Minh, Senior Researcher, Scaling Innovations, International Water Management Institute, and Nicole Lefore, Director, The Feed the Future Innovation Lab for Small Scale Innovation, Texas A & M.

Providing asset-based financing is considered an innovation that can enable people ‘at the bottom of the pyramid’, including women farmers, to overcome credit barriers. In sub-Saharan Africa, several solar irrigation pump companies are attempting to fill a widespread credit gap by offering asset-based financing, through which they essentially provide farmers with a loan to purchase a pump, for which the pump itself serves as security.

The advantage of asset-based financing is that it can give farmers access to solar pumps without the usual collateral or credit history required for a loan. This enables them to intensify production and increase their incomes. Farmers pay back the loans in installments, as the pump allows them to increase their incomes, in what is known as a pay-as-you-go (PAYGO) approach. PAYGO also sometimes includes follow-up training and regular product servicing during the period of repayment, which also fills the need for information and after-sales services.

Companies are benefitting from asset-based financing by expanding their markets, while farmers benefit from avoiding the usual credit barriers. But, while innovative, the question is whether asset-based financing is also inclusive when it comes to solar irrigation pumps?

Women in sub-Saharan Africa play a critical role in food security, providing as much as half of agricultural labor and playing significant roles in agriculture and livestock sectors. Yet, gender-based constraints to financial resources—such as loans, formal banking services, and ownership over land and other resources—negatively affect women’s ability to invest in productive assets, such as solar pumps.

Recent research by the Feed the Future Innovation Lab for Small Scale Irrigation (ILSSI), published by the International Food Policy Research Institute (IFPRI), highlights that women seeking credit face more significant supply and demand constraints, such as a lack of information, than men.

A group of farmers inspect newly received solar-powered irrigation pumps. Photo: IWMI.

While many development projects focus on improving women’s access to credit through village savings and loans associations or support through micro-finance institutions, such modes are either insufficient, unprofitable, or fail to reach resource-poor women and men farmers wanting to invest in productive assets. That’s why we are exploring how well asset-based financing enables women to invest in irrigation.

Gender gaps in current credit assessment tools

Companies considering providing asset-based financing to clients typically use credit scorecards to determine whether the client is creditworthy.

Such scorecards or assessment tools are used by a company’s credit review officers to assess commercial aspects of financing and to give a potential client a risk score and a consistency rating. If a potential client is assessed as low risk, and therefore qualifies for credit, the results of the assessment can also be used to set the terms of repayment. In short, credit assessments are a critical tool that aims to reduce the risks associated with asset-based financing for both the loan providers and for clients.

Within the ILSSI project, the International Water Management Institute (IWMI) has reviewed credit scorecard criteria and the credit assessment processes being applied by private solar irrigation suppliers in sub-Saharan Africa offering PAYGO or some form of asset-based financing. The initial review suggests women may still be excluded because the scorecard criteria may be inherently biased.

While credit risk assessment tools are to predict the likelihood of repayment, they are not necessarily designed to be gender sensitive. In fact, few of the irrigation equipment companies with which ILSSI has engaged target women farmers as potential clients for solar irrigation pumps.

Few irrigation equipment companies target women farmers as potential customers. This despite women’s essential roles in agriculture. Photo: IWMI.

We found that typical criteria in credit assessments include access to services and amenities, primary income-generating activity and income, household expenses, and water availability and utility, as well as the client’s farm and farming practices, existing credit access, and financial savings. In this way, use of resource ownership and income as criteria to assess the potential risk of agricultural clients marginalizes most women, as they tend to be resource poor.

At the same time, scorecard criteria exclude the factors known to influence women’s ability to achieve investment returns and repay credit, such as off-farm income, livelihood diversification, group membership and social networks, and financial management. Women farmers may not have the level of income or asset ownership to meet a threshold for low-risk financing, but women farmers may still have strong financial management capacity, awareness about availability of various financial services, and financial literacy. Women farmers generally also have diverse on- and off-farm livelihood activities, which a credit scorecard may not account for. We propose that including these income-generating activities would help better estimate the credit worthiness of women farmers.

Moreover, credit assessment criteria appear to miss the significance of group membership and social networks as well as socio-cultural aspects, such as power relations within households, women’s mobility, inheritance systems, and other socio-cultural relations that influence women’s access to resources such as finance, markets and extension, or information sources.

Creating equal opportunities for women farmers

We are now collaborating with private-sector solar irrigation equipment partners to develop gender-sensitive credit scorecard criteria. The gender-sensitive tool focuses on both the criteria components and the process. Criteria currently excluded, but that could influence women farmers’ ability to obtain and maintain PAYGO loans, will be brought into credit assessments. These additional criteria should also help to develop business models for asset-based lending to groups, which would allow women to pool their resources into a joint asset. ILSSI’s private sector partners will test the application of the new criteria in Ghana and Ethiopia.

We will be supporting continued development of the credit assessments in parallel with capacity development innovations. In Ghana, ILSSI is supporting innovation internships that are embedding young and promising researchers into company activities, including fieldwork on business and financing models to reach women farmers. ILSSI activities in Ethiopia include a ‘hack-a-thon initiative’ by IWMI and Bahir Dar University to develop an app-based digital scorecard to ease the data collection and analysis and improve the assessment algorithm.

Asset-based financing is seen as a high potential solution to credit constraints, building on the strengths of the private sector in development, but if poorly designed, this innovation could inadvertently deepen women’s lack of access to credit for productive assets. Reversely, if credit assessment tools are adapted to assess the creditworthiness of women farmers more accurately, there is potential for the approach to benefit both women and men farmers as well as private sector companies in a growing solar irrigation market.

Student interview: Breaking boundaries in scientific modeling for better, more sustainable water management

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Fati Aziz currently works as a Postdoctoral Research Associate at the Texas A&M University in College Station, USA. She completed a PhD in Climate Change and Water Resources in November 2017 at the University of Abomey-Calavi in Benin, based on modeling work completed under the Feed the Future Innovation Lab for Small Scale Irrigation (ILSSI). The PhD was sponsored by the German Federal Ministry of Education and Research through the West African Science Service Center on Climate Change and Adapted Land use (WASCAL).

What was the focus of your work with ILSSI and what were your most important findings?

In June 2015, during my PhD, I joined the Integrated Decision Support System (IDSS) team at the Texas A&M University as a visiting scientist for five months. I received training in the Soil and Water Assessment Tool (SWAT) tool, which can be used to simulate the quality and quantity of surface and groundwater and to predict the environmental impact of land use, land management practices, and climate change.

Then, in February 2016, I participated in an IDSS training organized by ILSSI in Accra, Ghana, and that’s when I finished the calibration and validation of the SWAT model for river discharge and sediment loads in the Black Volta River Basin.

Fati Aziz, Postdoctoral Research Associate at the Texas A&M University.

The Black Volta River Basin is the biggest sub-basin of the Volta River Basin, and it is shared by Burkina Faso, Ghana, Côte d’Ivoire, and Mali. Although its waters support significant economic activities, such as agriculture and energy production, the availability and use of water is threatened by population growth, changes in land use and land cover, and climate change.

Because I wanted to study the impact of climate change, land use and land cover change on the flow and sediment yield of the Black Volta, calibrating and validating the model was a critical step in my research. Proper model calibration and validation reduces errors in simulations and increases users’ confidence in the tool’s ability to make future projections.

When reviewing how well the SWAT model performed in terms of simulating the historical flow and sediment yield of the Black Volta, based on quantitative statistics during monthly calibration and validation, I found that the model simulated the two variables well during most of the calibration and validation periods.

Finally, when using the calibrated and validated model for projections, I found that all the model scenarios I used projected an increase in flow and sediment yield in the basin during the late (2051–2075) and end of the 21st century (2076–2100) periods, relative to the historical period (1981–2010). This was true for both seasonal and annual projections.

For example, the end-of-the-century projections under the RCP 8.5 scenario (the Representative Concentration Pathway 8.5 scenario, which represents one of several greenhouse gas concentration trajectories) showed an increase in flow ranging between +69% and +243% across models. The sediment load increase ranged between +358% and +412%. An increase in streamflow may result in floods in the basin region, while higher sediment load may increase the turbidity of the river and cause loss of reservoir storage. Since most of the population in the basin depend on agriculture for their livelihood, measures to cope with increasing floods and droughts, such as enlarging existing reservoirs to take up extra water for storage and for irrigation purposes, should be explored and developed well ahead of time.

Fati Aziz measures flows in the Black Volta River Basin with an OTT Qliner 2
Fati Aziz measures flows in the Black Volta River Basin with an OTT Qliner 2.

Why did you choose the discipline you work in? What pulled you toward this as a scientist?

Given the rapid increase in global population, urbanization, and climate change, among other challenges, optimum management of natural resources presents one of the most critical challenges of our time. Wanting to contribute to better and sustainable water resource management policies, which are based on sound scientific evidence, made me focus on this field.

What are your experiences as a woman scientist in modeling, which tends to be dominated by men, and would you encourage other women to work in this discipline?

My experience in this field is mostly positive. The male-dominated nature of the field is a great source of inspiration to me as it pushes me to work harder. Fortunately, my male colleagues are very receptive and respect my perspectives. Currently, as the only woman in my IDSS research group at Texas A&M University, I receive enormous support and encouragement from my male colleagues.

My dear woman, if scientific modeling is something you’re interested in, I strongly encourage you to go for it. Trust me, there’s real joy in “breaking boundaries” doing what you love.

What is your current focus of study and what changes do you hope will come from it?

I am currently assessing land suitability for cocoa cultivation in Ghana and Côte d’Ivoire using a multi-criteria evaluation technique based on geographical information systems (GIS). My study is part of a bigger research effort that aims to assess the use of supplemental irrigation to improve the production of cocoa and other cash crops in West African countries. My findings may assist stakeholders in developing better crop management strategies that improve yield and environmental sustainability. We hope that using supplementary irrigation for vegetables and cocoa seedlings will lead to increased food production, household income, and nutrition in the West African region.

Texas A&M University System Member