private sector

Multi-stakeholder dialogue on farmers’ access to credit for irrigation in Ghana

September 30, 2020 by Marianne Gadeberg

Ensuring that smallholder farmers have access to credit or other financing products is an essential requirement for expanding the use of small scale irrigation. However, lenders are often hesitant to develop products for smallholder farmers, and frontier markets imply risks that make financiers and equipment suppliers reluctant. Therefore, lack of access to finance has emerged as a key barrier to sustainable expansion of small scale irrigation.

To find solutions, stakeholders from the irrigation sector in Ghana came together for a virtual meeting on August 27, 2020. They discussed how to make more financing products available to farmers, who are increasingly leading investments in irrigation and other water management solutions.

A space for dialogue and collaboration

The meeting was the second congregation of the Small Scale Irrigation Dialogue Space, which was established in 2019 by the Feed the Future Innovation Laboratory for Small Scale Irrigation (ILSSI) and the International Water Management Institute (IWMI). The space is envisioned as a unique strategy for bringing stakeholders together to encourage collective thinking across sectors and explore new opportunities for expanding small scale irrigation.

On this occasion, the 45 meeting participants—representing government agencies, private sector companies, farmer organizations, financial institutions, and more— shared insights into challenges and opportunities in financing irrigation to benefit smallholder farmers, gender equity, and youth. They also discussed emerging innovative financing solutions to enable farmer-led irrigation investments.

A new partnership

The private sector plays a crucial role in overcoming market and financing barriers to expanding small scale irrigation. Acknowledging this dependency, ILSSI and partners have made concerted efforts to include private sector actors in dialogue discussions, and have most recently awarded its first catalyst grant to a private sector partner: PEG Africa.

PEG Africa works to bring solar power to West Africa, through distributing solar-power systems that provide for households’ energy needs. The company has a unique consumer financing pay-as-you-go system, offering farmers the option to make a minimum deposit and spread the rest of their payment over a productive period of 18 months. PEG Africa also runs a very rigorous credit assessment system, which considers the business case and water resources for each individual farmer.

With the grant, ILSSI and PEG Africa will collaborate on investigating business cases that are workable for farmers looking to access finance for irrigation. One objective will be to customize PEG’s pay-as-you-go system to solar-powered irrigation.

Recommendations to take forward

Participants in the dialogue meeting synthesized several key messages from their discussions, as summarized in the event report. First, the report says, expanding small scale irrigation requires expanding the whole ecosystem that surrounds the practice, including financing, policies, input and output markets, and more.

Second, enabling farmers to invest in irrigation, a single technology or financing solution, is inadequate—farmers’ interest in leading small scale irrigation investments must be supported throughout the whole value chain. Such support could include bundling credit with technologies, after-sale services, agronomic extension, input and output market access, and insurance services.

Third, financing solutions for smallholder famers are still missing. Many irrigation technologies and financing solutions need to be tailored to the local context and smallholder farmers’ conditions. Finally, strategic partnerships are valuable as multiple partners, such as relevant government, research, financial, insurance, and farmer organizations, can all contribute to ensuring farmers’ credibility when it comes to accessing credit.

ILSSI and its partners are continuing to champion the Small Scale Irrigation Dialogue Space in pursuit of expanding small scale irrigation in West and East Africa. Another multi-stakeholder meeting, focused on financing solutions for sustainable and inclusive farmer-led irrigation scaling, took place in Ethiopia on September 23, 2020, and more events are planned for the coming months.

Read the report: Small scale irrigation dialogue space: Partnerships and financing solutions for sustainable and inclusive farmer-led irrigation scaling in Ghana

Interview: Ethiopian entrepreneur invents new plow that breaks down barriers for small scale irrigation

June 11, 2020 by Marianne Gadeberg

Expanding the use of small scale irrigation requires problem solving across sectors. The Feed the Future Innovation Lab for Small Scale Irrigation (ILSSI) is partnering with private sector actors who can play important roles in developing and bringing to market innovative technologies. That’s what Melesse Temesgen, General Manager of Aybar Engineering PLC, did when he invented a new plow with numerous benefits, including increased infiltration of rainwater. His invention can help make more groundwater available for farmers to practice small scale irrigation in the Ethiopian Highlands.

**What’s the problem with the traditional Maresha plow that is so widely used by farmers in the Ethiopian Highlands?**

The main problem with the traditional Maresha plow is that it creates V-shaped furrows, leaving behind unplowed strips of land. Farmers have to plow at least twice, sometimes three times, and they have to move in a crisscross pattern over their fields. Beyond taking time and energy, this effort damages the soil structure, and it makes contour plowing—that is, following along the contours of the steep slopes—impossible.

Melesse Temesgen is the General Manager of Aybar Engineering PLC. Photo: AfricaInnovation.org.

Farmers are forced to place furrows along the slope, and that encourages rainwater runoff and soil erosion. That’s why the land in the Highlands of Ethiopia is severely degraded. Also, high rainwater runoff means that infiltration and groundwater recharge is very low.

Using the Maresha plow to till at the same shallow depth during centuries has created a hard crust below the soil’s surface that reduces water infiltration and root growth. This also results in soil loss and reduced groundwater recharge. This means that farmers face water shortages during the dry season.

Other problems caused by the Maresha plow include high evaporation of water from soil, difficulties in getting rid of weeds, a need for high draft power, and incompatibility with other soil conservation practices.

**What benefits come from using the Berken plow that you invented?**

The Berken plow solves all of the above problems. It completely tills the soil in the first plowing, and it allows farmers to carry out contour plowing. It tills deeper and disrupts the hard crust. It is also convenient to use in fields where soil and water conservation structures have been built. It requires less draft power, it controls weeds better, and it improves root growth, which results in better crop yields. In combination, this increases infiltration, boosting the groundwater level and water flowing in streams during the dry season. Increasing the availability of water is very important for smallholder irrigators.

Inspecting the Berken plow. Photo: Rudi Schmitter. — Field-testing the Berken plow in the Ethiopian Highlands. Photo: Rudi Schmitter.

How did you come up with the idea?

Long ago, we realized that the traditional Maresha plow is not effective, and we have tested out several different alternative options that didn’t work out for different reasons. Then, on March 5, 2007, two weeks after defending my PhD, I suddenly thought of creating a plow that tills deeply over a relatively narrow strip of land in combination with tilling at a more shallow depth over a wider area. This results in wide furrows, meaning farmers only have to plow once, and it breaks up the hard crust. But coming up with an acceptable prototype was not so easy. The first versions were not effective, while later versions were too heavy for the oxen to pull. These were followed by improved and lighter versions. The Berken plow, which has proved to have an ideal design, is the sixth version and was developed in 2015.

A close-up of the new Berken plow. Melesse Temesgen.

What have you learned from collaborating with ILSSI and our partners?

Working with ILSSI researchers has been very helpful. They studied the plow and its hydrological and agronomic impact scientifically. Their research enabled us to explain the benefits of the Berken plow in a scientific way, which became crucial for the promotion of the technology. This type of support from public researchers should be encouraged, and collaboration should be further strengthened.

**What is the next step to bringing the Berken plow to more farmers in the market?**

We are currently promoting and selling the Berken plow. Farmers like the plow very much, and it is the first improved plow in Ethiopia to be directly purchased by smallholder farmers.

What farmers like about the Berken plow is that it is easy to assemble and adjust, it is easily pulled by oxen, and it is good at eliminating weeds. In addition to having several agronomic and economic benefits, we plan to show smallholders that the Berken plow can also support small scale irrigation and the ecosystem by increasing water flow in streams and boosting groundwater levels during the dry season. We base our arguments not only on the design of the plow, but also on the findings of ILSSI researchers.

Private sector joins multi-stakeholder dialogues on farmer-led irrigation development in Ghana and Ethiopia

June 11, 2020 by Marianne Gadeberg

by Petra Schmitter and Thai Thi Minh

Farmer-led irrigation has been identified as one way to improve nutrition, increase incomes, and enable water security and greater climate resilience, by institutions such as the World Bank, African Union, and African Development Bank as well as by national governments.

However, systemic barriers, such as lack of access to credit, gender norms, under-developed irrigation supply chains, and limited in- and output market linkages, continue to prevent smallholder farmers from engaging in small scale irrigation globally. Because these farmers generate between 30 and 34 percent of the global food supply, it is crucial to tackle these systemic barriers.

Furthermore, private sector companies are increasingly recognized for the roles they can play in agricultural production and value chain development. This is no different when looking at small scale irrigation development, with irrigation supply chains and services being crucial to the resilience of smallholders and our entire food system. Finally, the market for serving small scale irrigators could be profitable for such companies.

So, how can businesses better be included in and even accelerate farmer-led irrigation and agricultural growth?

Multi-stakeholder dialogues to strengthen food systems

The concept of multi-stakeholder dialogues, and related learning alliances and innovation platforms, is not new. These approaches are used in various agricultural research-for-development projects. Outcomes and successes vary depending on how they are designed, the way they cater to diverse stakeholder interests and views, as well as the individual and institutional commitments. Hence, they need to be carefully designed to ensure contextual relevance to stakeholders’ needs and interests, while addressing the complexity of the enabling environment.

In Ghana and Ethiopia, platforms or dialogue spaces on small scale irrigation either do not exist or have a narrow mandate. Additionally, private sector companies have largely been overlooked as partners in existing platforms. To increase the resilience of our overall food systems by facilitating smallholders’ access to irrigation, we are working toward including the private sector.

The International Water Management Institute (IWMI), under the sponsorship of the Feed the Future Innovation Lab for Small Scale Irrigation (ILSSI), has kick-started system-level collaboration, including with the private sector, through multi-stakeholder dialogues in Ethiopia and Ghana to create ‘win-win’ solutions in small scale irrigation.

Participants at the multi-stakeholder dialogue event in Ethiopia in February 2020. Petra Schmitter/IWMI.

A dialogue to discuss regulations and financial support mechanisms for the private sector

Analysis of business cases for solar-powered irrigation in Ethiopia shows that investments in this area could boost food and nutrition security. However, the current lack of clarity on tax regulations for solar-based products and irrigation equipment, following recent policy changes, hampers the current development of solar irrigation supply chains and services.

“Our long time efforts have helped us achieve quality certification and duty-free import for solar energy products in Ethiopia. Unfortunately, while achieving that, solar pumps for irrigation have not yet been included in the list of duty-free items because of some certification issues. We want to bring affordability to irrigator clients, but this requires changes to import regulations,” said Nabil Ishak, Vice-chairman of the Ethiopian Solar Energy Development Association.

Nabil Ishak is the Vice-chairman of the Ethiopian Solar Energy Development Association. Petra Schmitter/IWMI.

Similarly, in Ghana, complex tax regimes constrain market expansion:

“We face some challenges when it comes to importation duties. Solar pumps should be exempted. However, they made us pay for it and said, ‘Later on, you can apply for tax exemption.’ Given the challenges of recovering the taxes, our products are now more expensive for the farmer,” said Iyad Hatoum, Managing Director, HTC IrriGATE.

As long as irrigation equipment remains a high-risk product in frontier markets, suppliers will be unable to reach the poorest farmers. Fragmented markets and unclear application of regulations, as well as limited infrastructure in remote areas, add up to high transaction costs, which are passed on to farmers.

A dialogue space offers the opportunity to bring relevant actors together to catalyze change. Companies’ growing interest in market-based solutions led to unprecedented participation in the multi-stakeholder dialogues: companies made up around one-third of participants in both Ghana and Ethiopia.

A dialogue to accelerate farmers’ initiatives and bundle solutions

Potential ‘win-wins’ emerge when irrigation supply chains and services are integrated with agricultural value chains. In the past, businesses have focused mostly on selling irrigation equipment and less on providing services such as agricultural extension, operation, and maintenance or linkages to value chains. At the same time, development organizations often focus on the agricultural value chains or on micro credit, without necessarily considering the irrigation supply chains and services.

Bringing relevant actors—including private sector companies—together can help bridge these fragmented efforts and create opportunities. For example, the International Livestock Research Institute (ILRI) is setting out to collaborate with farmer cooperatives producing dairy products as an avenue to expand irrigated livestock fodder. Stronger linkages between irrigation suppliers, fodder irrigators, dairy producers, and processors mean business opportunities across the market.

In Ghana, irrigation equipment businesses have also begun to develop such linkages. Companies are providing a bundled package of irrigation equipment and services as well as credits and output market linkages to farmer groups, allowing them to grow vegetables in the dry seasons. These packages help ensure that farmers are able to pay off their equipment after the third harvest and are able to expand their irrigated area within two to three seasons. Hence, in these regions, vegetable value chains can be maintained without disruption from supply shortages in the dry season.

“We had to come up with a complex, but flexible business model since December 2017 to deal with small scale farmers, who have from 1 acre to 10 hectares. We have combined irrigation supply and services, which include installation and after-sale technical support, credit, and market linkages to farmers. This business has brought the best year for us in 2019,” said Kwabena Opagya Amoateng, the CEO of Agro-Africa.

A dialogue for interactive learning and inspiration

In Ghana and Ethiopia, the actors invited to the multi-stakeholder dialogue acknowledged the value in fostering learning and experience sharing. Actors valued the opportunity to learn from what works and what does not, whether it is a business case, a policy regulation, or approaches to support social and gender inclusiveness. Actors mentioned that they see the dialogue space as a means to facilitate adaptive learning from mistakes, reflect upon system-level weaknesses, and leverage others’ strengths.

“From what I have seen today, this multi-stakeholder dialogue has brought quite a significant number of private sector actors, which is an important element, and in my opinion it should continue in the future and also be linked to existing government and development partner dialogues,” said Kaleb Getaneh of Ethiopia’s Ministry of Water and Irrigation.

Petra Schmitter is a Research Group Leader for Sustainable and Resilient Food Production Systems, and Thai Thi Minh is a Senior Researcher, both at the International Water Management Institute.

Scientists and entrepreneurs battle climate change and water scarcity in the Ethiopian Highlands

March 18, 2020 by Marianne Gadeberg

Groundwater comes from the ground, right? Wrong. In the face of growing water scarcity, scientists, entrepreneurs, and farmers turn the problem on its head and increase groundwater reserves through improved water and soil management.

It is no surprise that millions of farmers are facing increasing water scarcity under the current climate crisis. In the Ethiopian Highlands, this reality strikes especially hard when the dry season begins every year in October. As the rain stops, farmers rely on shallow wells to supply them with water for basic household needs, livestock, and irrigation.

Each year, many of these farmers eventually – say, around December – come to discover that their well has run dry. Groundwater reserves have become exhausted before the end of the dry season. These water shortages have serious consequences for the health and welfare of farmers, and reducing water use has been considered the obvious answer. What’s often overlooked is that groundwater availability during the dry season can be boosted if only water and soil are used and managed right during the previous season.

Scientists from the Feed the Future Innovation Lab for Small Scale Irrigation (ILSSI) are looking at rainfall and groundwater as one interconnected system. This shift in thinking opens the door to a new kind of solution, namely to increase the supply of groundwater, in addition to limiting its use when viable. A new plow, developed by an Ethiopian entrepreneur, provides part of the answer.

Plowing at the same depth for centuries creates a hard crust in some soils, hindering groundwater recharge. Petterik Wiggers/IWMI.

A lifeline during the dry season

Households in Ethiopia’s Highlands rely primarily on shallow wells, up to 25 meters deep, to access groundwater for all uses, according to a survey carried out by graduate students at Bahir Dar University, in partnership with the International Water Management Institute (IWMI).

Being able to rely on wells for year-round access to water is a main coping mechanism for farmers living in a changing climate. This means that communities are left with difficult choices when wells are depleted in the middle of the dry season. What little water might be left in the wells, plus whatever can be carried in from other better-supplied wells, ponds, or rivers, must be used wisely.

When it comes to prioritizing water uses – drinking, washing, watering livestock, and farming – it is often irrigation that loses out, as households have to choose. But, without enough water for irrigation during the dry season, fewer nutritious crops will be available, leaving families hungry and undernourished. Restocking shallow groundwater reserves therefore becomes central to ensuring healthy, viable livelihoods.

A new plow could help

Groundwater reserves are replenished when rainfall infiltrates into the deeper soils. But this natural cycle has been disrupted in the Ethiopian Highlands, where much of the otherwise ample rainfall runs off the sloping hills sides, causing soil erosion and destruction.

For centuries, Ethiopian farmers have used the traditional Maresha plow to till their lands. The problem is that plowing at the same depth for so many years has in some soils formed a hard crust – a hardpan – below the surface. It prevents infiltration of rainwater into the deeper layers of the ground, thus hindering much-needed recharge of groundwater reserves.

The Berken plow, invented by private sector entrepreneur Aybar, is tested. Rudi Schmitter.

Manually breaking up this hard crust can reduce rainwater runoff by more than half, but the work is cumbersome, and without access to suitable machinery, farmers are unlikely to do it. That’s one reason why ILSSI researchers – at IWMI and Bahir Dar University – have collaborated with private entrepreneur Aybar to test a new kind of plow. The Berken plow cuts deeper than the traditional plow, breaking up the hard crust formed in previous years. Emerging research results indicate that the plow conserves soil and water by reducing rainwater runoff and that reduced soil disturbance increases soil moisture.

In other words, using the new Berken plow might increase water stored in soils, helping to recharge groundwater reserves. This would mean that more water would be available for dry season irrigation, and for supplementary irrigation in the rainy season, thanks in part to a private sector innovation.

Limited groundwater on the slopes of the highlands

Restocking groundwater reserves where possible, using tools such as the Berken plow, is not in and of itself sufficient to ensure that farmers have enough water to irrigate their fields. In the Ethiopian Highlands, sloping hills represent a particular challenge.

ILSSI researchers, with partners, have discovered that groundwater reserves are rapidly diminishing in the highlands throughout the dry season because it migrates away from the hillside through the soil. Because gravity pulls groundwater away from the hillsides, sloping lands can only provide significant irrigation inputs during the first three months out of the eight months long dry season, their research showed. In the remaining part of the dry season period, only wells located at the bottom of the slopes, close to faults, contained water.

These results were obtained in a study of the Robit Bata watershed in Ethiopia’s Lake Tana basin, where almost half the area is made up of slopes above 10 percent, which is representative of watersheds in the highlands of Ethiopia. This limited availability of groundwater on the slopes highlight that when planning for small scale irrigation, it is not enough to consider the groundwater recharge only and ignore the lateral movement of water. If the lateral flow of groundwater away from hillsides is not considered, any estimated irrigation potential will be unrealistic in actual practice.

Therefore, introducing conservation agriculture and best farming practices could help farmers grow more crops, even as shallow groundwater travels downhill. Researchers from Bahir Dar University have shown that the combination of best irrigation practices and conservation agriculture helps limit the amount of moisture that evaporates from the soil, thus increasing soil moisture and crop productivity.

Mulching between crops is one characteristic of conservation agriculture. Mulugeta Ayene/WLE.

Better water management for climate resilience

The biggest lesson for farmers and decision-makers alike is that groundwater and rainfall are closely interlinked. Private sector innovations and improved farming practices can help farmers manage water as one system – recharging groundwater as much as possible, in addition to using available water as best as possible. Improving management of rain- and groundwater, by understanding that the two make up one interlinked resource, is a critical climate adaptation strategy.

Partner news: Benefits of farmer-led irrigation are “immense”

March 5, 2020 by Marianne Gadeberg

The following update on the Feed the Future Innovation Lab for Small Scale Irrigation was originally published by agrilinks.org.

Why small-scale irrigation?

In sub-Saharan Africa, scarce and increasingly variable rainfall represents a major risk. It severely impedes agricultural growth, hampers productivity and makes it difficult for farming households to meet basic needs. Investing in sustainable, profitable, and gender-sensitive irrigation can help alleviate these threats, create greater climate resilience, and put millions of farmers on the path toward food and nutrition security.

The Feed the Future Innovation Lab for Small-Scale Irrigation (ILSSI) has become a global leader in generating evidence that can inform investments in support of the U.S. global food security goals. Our focus on small-scale, farmer-led irrigation is a shift from earlier trends in research and investments that focused on public, communal schemes. The performance of such larger irrigation schemes has often been disappointing – partly due to water governance challenges – but when farmers take matters into their own hands and make their own, smaller investments, the benefits of irrigation prove to be immense.

ILSSI has demonstrated that farmers’ own investments hold high potential to increase incomes both for farmers and actors in irrigated value chains, while contributing to agriculture-led economic growth. Research also suggests that households that invest in farmer-led irrigation have better nutritional security. There are multiple pathways between irrigation and nutrition, but farmers often use their increased income to purchase food for a more diverse, and nutritious, diet. Irrigated production also generally increases the availability of vegetables and leafy greens on the local and regional market, thus supporting more nutritious diets not only for farmers themselves, but communities in general. Achieving greater gender equality through irrigation production is also possible, but requires support for empowering women farmers. ILSSI has focused on the value chain for irrigated fodder, which is showing promise, particularly in Ethiopia, to provide animal feed at critical times.

More food and better lives

As men and women farmers make the transition from rainfed to supplemental and dry season irrigated production, ILSSI has tested new tools, technologies and practices to enhance water productivity, boost agricultural yields, improve health and nutrition, strengthen farmers’ resilience and promote gender equality.

Conservation agriculture practices and small-scale irrigation can reduce the risks of water scarcity and meet growing food demand. These methods also improve quality and yields of produce at the same time.
Solar pumps for water lifting can bring down costs of irrigation for farmers living in rural areas and are a preferred technology for agriculture and domestic uses. ILSSI has supported the development of an open access, interactive tool for solar suitability mapping throughout sub-Saharan Africa, which is now enabling companies to know where solar pumping would be suitable, reducing the risks of investing in frontier markets, and helping NGOs and donors target solar irrigation interventions.
Irrigation scheduling tools can enable farmers to achieve higher water productivity and reduce their labor input by showing when to irrigate and how much water to use. Such tools can also increase farmers’ yields and boost the quality of produce. The use of these water-scheduling tools is being taken forward by donors, including in an FAO-funded project with water user associations in Ethiopia, reaching more than 600 farmers.
Fodder for livestock can be supported by small-scale irrigation, and it can help farmers diversify their incomes while securing adequate animal-sourced foods, such as milk, for their families. Promising results are drawing the attention of farmers and government officials in Ethiopia.
Irrigation can improve nutrition through multiple pathways. ILSSI partners and researchers have been working with the World Bank to support nutrition-sensitive irrigation investments.
Improving access to credit would allow even more farmers to benefit from small-scale irrigation. Microfinance options that could support smallholders to access pumps and other equipment do exist, including new ideas such as “Uber for the farm”, but need to be brought to scale.
Realizing the full potential of small-scale irrigation in sub-Saharan Africa requires improving gender equality in agriculture. Not only in terms of access to technologies and equipment; it also means ensuring that women can reap the benefits of irrigation.

Taking solutions forward

Building on research from its first phase (2014–2018), ILSSI is now investigating how to feasibly and sustainably expand small-scale irrigation and is directing more resources to improving access and adoption through market systems. ILSSI is partnering with private companies in Ghana and Ethiopia to test ways to build input and output markets around irrigated value chains to establish affordable, reliable supply for example pumps and to foster a viable, healthy market for irrigated crops such as vegetables and seeds. Solar pumps will be a central technology, along with the critical component of appropriate credit and finance – all part of effective and sustainable business models. We are also partnering with small and medium enterprises and cooperatives in Ethiopia to strengthen irrigated fodder production and markets, and examining irrigated seed production for vegetables. Business models that promote gender equity and opportunities for youth are also being sharpened.

Small-scale irrigation technology and water resources may be primarily used for agriculture, but also provide water for consumptive and non-consumptive uses. ILSSI is working with the Household Water Insecurity Experiences network on the effects of water access for productive uses, on domestic and other uses, toward reducing water insecurity. Our focus continues to be farmers’ own irrigation investments, while also deepening our analysis of the changing climate and water-related risks from household to watershed and basin level to increase both environmental and social resilience.