Innovative Agricultural Water Management Investment Opportunities:

1. 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. Purpose • Assess range of AWM investment opportunities • Propose potential new AWM investment opportunities for IFAD to consider, and why

3. 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. 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. 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. The AgWater Solutions Project 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. 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.

7. Identifying AWM Solutions:Water within the larger context of rural livelihoods POLICIES/ INSTITUTIONS ACCESS Forward Linkages (Ag Products/Markets) Backward Linkages (Inputs) PROFITABILITY OF AWM SOLUTIONS IMPROVED LIVELIHOODS Externality Management Resource/Livelihood situation • Contributes to smallholder livelihoods • Benefits women and men • Cost-effective • Suitable for out-scaling • Addresses resource sustainability An AWM solutionis any measure, including technologies, products and practices, that increases or improves AWM knowledge, policies and financing and…

8. 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

9. Targeted investments to address AWM constraints & enhance agricultural sector's potential Improved livelihoods of smallholder farmers 2 3 4 1 4 solution pathways proposed

10. Current Types IFAD Investments

11. Other Potential Investments

12. The Potential of PUMPS

13. 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. 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. Smallholder AWM: A vibrant and growing sector: Build on existing trends India > 50% of the irrigated area watered by smallholder pumps Africa - Smallholder AWM reaches more farmers than public irrigation Agricultural Water Management in Ghana Source: estimates based on farmer surveys under this project

16. 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. Sector largely overlooked by investors Investment costs of irrigation technologies in sub-Saharan Africa

18. 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. 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

20. Water StorageMultiple options, critical issue as adaptation to climate variability & change

21. 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 will be used as needed regardless of design

23. 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. 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. 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!