Earth Day 2018: Solar-powered irrigation can boost rural development, but also poses risks

- Avinash Kishore

Irrigation is one of the most effective means for boosting agricultural production, but powering the withdrawal of groundwater can be an expensive and polluting process. Solar panels provide a cleaner energy source for pumping groundwater than traditional diesel-based pumps, and their cost has rapidly fallen in recent years—exciting policymakers in South Asia about their promise as a viable and sustainable tool for rural development.

To mark Earth Day 2018 (April 22), here is a look at what our research reveals about the solar pumps and sustainable agriculture: In the Indian state of Bihar, the pumps have been an effective means for boosting wheat yields that is cheaper than diesel pumps. But appropriately implementing this technology does not come without challenges.

Encouraging the adoption of solar pumps in diverse conditions across South Asia calls for tailored approaches that leverage the benefits of the technology without creating negative impacts like market distortions or the depletion of natural resources.

Installing solar pumps has very high capital costs that most farmers in the region cannot afford. Once installed, however, solar panels provide energy for free, so that over a pump’s life-cycle, energy from a solar pump works out to be cheaper than that from a diesel pump. To address this barrier to entry, governments in South Asia are offering high capital subsidies on solar pumps.

These subsidies have been successful in increasing the use of solar pumps, but also create market distortions that limit their broader viability. If solar pumps are a viable technology, policymakers should shift their focus from subsidizing the upfront costs of buying to finding innovative ways to finance the purchases. IFPRI has worked closely with a private firm experimenting with different technological and financial innovations that hold great promise to make solar pumps an affordable purchase, even for smallholder and women farmers. But as long as heavy subsidies for solar pumps exist, such promising innovations have little chance of succeeding.

The nature of the costs of owning and maintaining solar pumps also has potentially negative impacts for the sustainable management of groundwater. Since farmers invest heavily and it costs almost nothing to maintain and use a solar-powered pump, the incentive is to pump as much water for irrigation as possible and to increase crop yields as much as possible. If solar pumps are promoted aggressively in water-scarce areas of South Asia, they can aggravate existing groundwater depletion problems.

Many state governments in India are trying to address this issue by bundling a subsidy on solar pumps with subsidized micro-irrigation systems that boost efficient water use. But this effort alone won’t suffice: Using water efficiently does not necessarily inhibit its overuse.

Instead, farmers need an incentive to save the energy produced by their solar panels for something other than pumping groundwater. Net-metering solar panels measure how much power is used out of the total produced. This technology can provide farmers the option of selling surplus electricity back to the grid—an incentive to conserve solar power, and with that, water. This approach may be the only way to make solar pumps a sustainable option in water-scarce areas.

In the Eastern Gangetic Plains of Bangladesh, India, and Nepal Teraii, governments should promote solar pumps through financial and business process innovations to make them financially viable for the greatest number of people. In the rest of South Asia, where groundwater is scarce, solar pumps should be promoted only with available net-metering. And in canal commands that regulate irrigation systems, small solar pumps connected to water storage structures can promote more efficient use of water and support high-value agriculture through better water control.

While not a panacea, solar pumps equipped with the appropriate technologies and supportive policies can help farmers across South Asia manage water more responsibly, and should be a part of any sustainable agriculture strategy.

Avinash Kishore is a Research Fellow in IFPRI's South Asia Office in New Delhi.

The blog was originally posted on IFPRI.org

MSP hike: Not a viable policy option

Farmers in India do not get remunerative prices for their crops even as consumers complain of high and rising food prices. A year of good production often turns out to be terrible for farmers because of the price crash. In his budget speech, the finance minister proposed raising the minimum support prices (MSP) to 1.5 times the cost of production, to ensure remunerative prices to farmers and reduce the price risk they face.  The finance minister, however, did not clarify what cost of production will be considered for setting MSP. In an earlier article, Ramesh Chand, member of the NITI Aayog, had suggested a 50% margin over the A2+FL cost, which includes all paid-out costs and the imputed cost of family labour (FL). If so, MSP is already more than 1.5 times this cost for five of the six Rabi crops for which support prices are announced. Safflower is the only exception. Among Kharif crops, MSP was more than 1.5 times the A2+FL cost for bajra, tur and urad.

Farmers in India are under pressure to sell their produce right after the harvest, which makes their supply inelastic. (AP).
Photo-Financial Express

For paddy, the largest Kharif crop, MSP was higher than 1.5 times the A2+FL cost of production in 2017-18 in Andhra Pradesh, Bihar, Chhattisgarh, Gujarat, Jharkhand, Karnataka, Punjab and Uttarakhand—states that contributed more than 70% of the total rice procured. Thus, 80% of the public procurement of food grains is from the states where MSP already provides more than 50% margin over the A2+FL costs. What about the role of MSP in crops that are not publicly procured? Our ongoing research shows that without procurement, MSP is useless for farmers when it exceeds the market price, and harmful, when it is below it. Take the example of chana and arhar whose MSPs have been more than the market price in only two out of 17 years since 2000. Farm harvest price data shows that pulse traders use the low MSP as a benchmark and offer farmers prices close to MSP. Farm harvest prices bunch unnaturally around MSP when it should be higher. In game theory parlance, low MSP becomes a Schelling point for tacit collusion among traders.

What if the government heeds the demands of farmer leaders and sets MSP at 1.5 times the total (C2) cost of production? MSPs of most crops, except wheat, will have to rise sharply. How will the public procurement of select food crops at such high MSPs affect India’s farmers and its agrarian economy? MSP at 1.5 times the C2 cost will be significantly higher than the market price of most crops. Procurement at high MSP will result in rapid build-up of large government stocks that would need to be sold at a loss. Supply will increase in response to high and assured prices. Without commensurate increase in demand, market prices will fall and the wedge between the market and support prices will increase. The government will have to procure more grains and sell them at higher losses.

The fiscal costs of such a spiral have probably not been fully accounted for. The proposed MSP policy is not only unviable, but it also amounts to virtual public takeover of India’s crop economy. Can alternatives like the Madhya Pradesh’s scheme of bridge pricing, called Bhavantar, work? Under Bhavantar, the government pays farmers the difference between the MSP and the modal market price, but does not procure grains itself. Bhavantar is less distortionary and it saves the government hassles of procuring, storing and offloading crops; but it may not work along expected lines.

Farmers in India are under pressure to sell their produce right after the harvest, which makes their supply inelastic. In contrast, traders can afford to strategically wait for the right time to buy. An old rule of public economics tells us that the government can decide whether to transfer subsidy to buyers or sellers, but it cannot dictate how the subsidy will be shared between them.

The party that is more desperate—in this case, farmers—will get a smaller share of the subsidy. A large share of Bhavantar payments will go to traders—even if the government transfers the money to farmers’ accounts. How large the share would be depends on the supply-demand dynamics of each crop and market. There are already news reports about complaints of collusion among traders in Madhya Pradesh, where Bhavantar is being pilot tested. With Bhavantar, farm harvest prices will be 1.5 times the C2 costs only if the MSP is set further higher. Rising subsidy bills is not the only problem with following the C2+50% rule. There will be many other negative effects of this policy.

*First, crops with MSP account for only 28% of the total value of agricultural output. High MSPs only for these crops will discourage the much-needed diversification to fruits, vegetables and other high-value commodities, resulting in high food prices and poor nutritional outcomes.

*Second, a grains-obsessed food policy discriminates against smallholders, who have the comparative advantage in producing labour-intensive high-value commodities. Diversification to high-value agriculture is the only way millions of India’s smallholders can earn a decent income off their farms.

*Third, raising incentives for rice production in water scarce areas, like Punjab and Haryana, is also environmentally unsustainable.

* Finally, only 6% farmers sold their produce at MSP in 2013. The bureaucratic costs of extending price support to all farmers of India will be prohibitive.

India’s food and agricultural policies are geared to protect consumers more than farmers. Ad hoc policies—like storage limits and bans on futures trading, ostensibly to protect consumers—increase uncertainty and discourage private investments in markets. Instead of resorting to distortionary subsidies and market stifling policies, the government should invest in market and storage infrastructure, deregulate primary wholesale markets, encourage inter-state trade, set fair, consistent and predictable international trade policies, and invest in research and extension to increase farm incomes and accelerate agricultural growth.

PK Joshi is director South Asia, Avinash Kishore is research fellow, IFPRI. Co-authored with Devesh Roy, CGIAR research programme on Agriculture for Nutrition and Health (A4NH). This piece was originally published in Financial Express.

Innovative ways to increase farm income

Indian agriculture is at a crossroads, with a number of challenges and enormous opportunities. The key challenges are small and declining landholdings, price volatility and climate risks. Growing demand for food in the domestic and global markets offers huge opportunities. The question is, how can we harness opportunities and overcome constraints to raise farmer incomes, especially small and marginal farmers? As many as 86% of the holdings in India are small and marginal, with less than 2 hectares of land. Several new programmes and schemes have been launched by the government to increase farm income. There are several mega flagship programmes, including the Pradhan Mantri Krishi Sinchayee Yojana, Soil Health Card scheme and Pradhan Mantri Fasal Bima Yojana. This year, the Union budget has also fulfilled a long-standing demand of farmers to fix minimum support prices at 50% above production cost. All these programmes will enhance farmer incomes if implemented effectively.

Photo: Ramesh Pathania/Mint

However, it appears that the implementation part is on a business-as-usual basis. As usual, control is with the government rather than focusing on effective engagement of the private sector. To accomplish the expected benefits, especially for small farmers, there is a need to develop innovative institutional arrangements for converging investment, aggregating production and consolidating markets. We are proposing a few “business-not-as-usual” areas to develop institutional arrangements so that small farmers can participate in these programmes and share the benefits of emerging opportunities.

The foremost requirement is investment in activities which create productive assets. The agriculture sector needs huge investment to transform and become more attractive and remunerative. Research reveals that compared to other sectors, investment in agriculture contributes more to reducing poverty. This is because the majority of the population lives in rural areas and is dependent on agriculture.

The last three Union budgets had various programmes to step up investment in the agriculture sector. However, more is needed to make it efficient, competitive and sustainable. There are three possible options to supplement government investment: (1) Converge various region-wise government schemes into one umbrella programme. This will check duplication of efforts and reduce administrative costs. (2) More incentives may be given to corporate social responsibility (CSR) initiatives for agricultural development schemes. Many corporate houses are already contributing in rural areas but the amount is meagre in the agriculture sector. We may develop a kitty of CSR funds for agriculture by allocating a fraction of overall CSR spending by individual corporate houses for agricultural development. Corporate houses may be incentivised and recognized for their contributions. (3) Pilot public-private partnerships (PPPs) in developing agri-infrastructure. India has an excellent track record of PPPs in developing infrastructure, which benefits rural areas as well as the agriculture sector. However, we have not tried PPPs to create agri-infrastructure, such as agricultural markets, warehouses, cold storage, cold chains, irrigation delivery and extension services. These will supplement the government’s investment in agriculture. The government may also prioritize where more resources are to be allocated. For example, in commercial areas, the private sector is present and, therefore, the government may give low priority to such areas. In areas where agriculture is at a subsistence level, the government needs to accord high priority.

The role of start-ups offers huge potential in the agriculture sector that is yet to be harnessed. The prime minister has said that start-ups can establish laboratories for soil testing and food commodity certification. There are ample lucrative opportunities that may bring farmers and start-ups together to enhance farmer incomes. The government has launched the e-NAM platform in most mandis. However, these are mostly operated by traders, as the small and marginal farmers have a tiny marketable surplus. Also, they cannot participate in the existing available warehouses, cold storage, and futures market. Therefore, there is a need to create institutional arrangements that will aggregate their produce for marketing and storage. We can draw lessons from the stock market, where a small investor purchases mutual funds rather than going directly to the share market. The mutual funds are operated by professionals. We need professionals who can develop commodity and region-wise clusters of farmer groups for marketing, storage and participation in the futures market. These professionals can participate in e-NAM on behalf of farmers. Similarly, there are opportunities for start-ups for agri-packers and movers, door delivery of inputs, services and agro-advisory. A small farmers’ agribusiness consortia (SFAC) can take the lead in developing appropriate institutional arrangements to attract agribusiness start-ups for such initiatives, which will help smallholders to take advantage of government programmes.

It is, therefore, pertinent to develop innovative institutions in a new paradigm to increase farmer incomes. We need to take up some pilots that can be subsequently scaled up—depending on the lessons learnt—to cover the majority of smallholder farmers. Failing that, ongoing efforts will not yield the desired results.

P.K. Joshi is the Director-South Asia, International Food Policy Research Institute, New Delhi. This article was originally published in  liveMint

What Happens when Scientists Design Soil Health Cards for Farmers

The Ministry of Agriculture in India is placing all bets on the 86 million USD Soil Health Card Scheme to provide nutrient recommendations to farmers based on soil health tests, with the expectation that it promotes balanced nutrient management practices. The Soil Health Card (SHC) scheme was launched by the Government of India in 2015. Under the scheme, the government has mandated the provision of SHCs to every farmer at an interval of two years (previously three years). These cards contain soil test results and crop-wise recommendations of nutrients and fertilisers required for the individual farmer to help them improve productivity through judicious use of inputs. These results are based on soil tests that are being conducted on a grid basis - samples are drawn in a grid of 2.5 ha in irrigated area and 10 ha in rain- fed area with the help of GPS tools and revenue maps. About 100 million cards have been printed and distributed to farmers across the country, with the counter increasing with every passing second (PIB, 2017). These results are presented to farmers in dual-coloured single-side printed A4 sheets (here).

Photo Credits: Dakshinamurthy Vedachalam, CIMMYT

Do farmers understand these cards?
In 2017, researchers on the CSISA project undertook several focus group discussions with farmers in Bihar and Odisha, to seek answers to the following questions. Are farmers able to:
i) understand the card
ii) trust it to provide accurate information and finally,
iii) change nutrient application behaviour as per the recommendations provided in the cards (we ask these questions in one-to-one surveys with farmers who are then brought together for FGD’s)
With a total of 21 FGD’s involving more than 100 farmers, and 5 Key Informant Interviews in the states of Bihar and Odisha, we conducted user tests of the present form of the SHCs. Those farmers who had received the cards had kept them in safe custody after having received them and had only taken those out on the day of our interactions when they were informed they were requested to carry those to the meeting place in the village. The interactions lasted for about an hour with questions directed towards assessing the usefulness, attractiveness, comprehensives, relevancy and persuasiveness of the cards.

What do we find?
There were two major barriers to comprehension of the SHCs – even for the most well-read respondents (most of whom had studied at least until the primary grade and one of whom was an MBA) in our sample. Both logical and lexical semantics were misplaced in the cards, with information relevant more for the scientists than for the farmers. The present cards are more technical than user-friendly and contain more information than is needed for action with the result that lack of relatable visuals and crowded texts are driving away any attention from the relevant information contained in the cards.

Too scientific
Farmers were often unable to distinguish between the different sets of tables mentioned on the card. The fonts were found to be too small and most farmers faced difficulty in reading the text in less than 8-point size fonts. Respondents were not familiar with all nutrients and micronutrients listed on the cards. For example, the soil results table in the present table begins with details about their soil’s Ph, EC and OC content – all three of which was gibberish for them in the local language. With a little probing and assisted reading, some farmers could follow and identify the nutrients listed further, albeit with local reference terms.
In both the states, we found a mix of cards in English. Hindi and Oriya languages and where there were translations, they were mostly phonetic translations of the English words. For example, Ph (which is the numeric scales used to specify the acidity or basicity of a solution) in English was represented as /f/ in the local language. Literal translations of some of the most common nutrients restricted the interpretation for those farmers who could read but not comprehend. Some farmers could infer the values mentioned, with prompts from our end. They read the recommended values of nutrients very carefully, after being explained.
For those who could not read, it is a different story altogether.
Recommendations for input application were of nutrients (and not the final fertilizer name that is prepared from these combinations), which not more than a handful of farmers in our sample understood. Nitrogen was inferred as Urea while Potash was inferred as DAP by the respondents– in reality, they are only components of the overall fertilizer. Such interpretation can be very risky for most farmers who are unable to distinguish between nutrients and fertilizers.

Not from my field!
The lack of site-specificity of the test results was an overpowering determinant of the lack of trust the respondents had in the results provided on the card as well as the recommendations provided therein. When the values were in the range of their existing practices, recommendations were perceived as correct. Whereas, when the values were different from their expectations or practices (particularly in Odisha where the urea recommendations were almost twice of their present application rates in the villages we went to), the immediate response was to discard the recommendations in lieu of the fact that soil samples were not taken from their respective fields.

So?
The first step to prompt action is to generate understanding. If farmers do not understand the content, there is little value addition of the program. As a result, we took some efforts towards redesigning the SHCs to simplify the contents and to also make it more attractive for the relevant audience by using more visuals. Visuals help overcome language barriers, and hence should be the focus of a scheme that aims to reach out to the masses. With the assistance of development communications professionals, we redesigned the present cards, reduced the total amount of text and increased the font size of the texts, used symbols to represent levels (low, medium and high) and added several illustrations (such as pictures of fertiliser blends) to inform the less educated. These new designs were retested over 2 rounds in Bihar, in coordination with the Bihar Agricultural University (BAU), Sabour. Several iterations were also made in the new designs to account for suitable colours and clearer symbols. A final design, that farmers found attractive and easy to understand was submitted to the BAU for all their SHC work moving ahead. This new design was also launched by the Union Minister of Agriculture, Shri Radha Mohan Singh on the 24th February 2018.
These cards are expected to be distributed to several hundred farmers under the University’s program area and our follow up steps in this regard are to undertake an assessment of the receiver’s experiences with the new cards, their interpretability and its eventual impacts on nutrient application behaviour. Further research and more concrete evidence on the usability of these SHCs will help inform the policymakers of the relevant changes that are needed to be made in the national Soil Health program to encourage greater adoption.

Vartika Singh is Project Manager in the Environment, Production and Technology Division of IFPRI and Sujata Ganguly is Research Consultant with International Maize and Wheat Improvement Center (CIMMYT).

Policy Dialogue- Innovations in Ensuring Remunerative Prices (MSP) to Farmers: Challenges and Strategies & Launch of Global Food Policy Report 2018

Azadpur Mandi-Wholesale Market, New Delhi, India. Source: (Flickr)/ Vaishali Dassani, IFPRI

International Food Policy Research Institute (IFPRI), jointly with the National Academy of Agricultural Sciences (NAAS), and the ICAR- National Institute of Agricultural Economics and Policy Research (ICAR-NIAP), is organizing a Policy Dialogue on Innovations in Ensuring Remunerative Prices (MSP) to Farmers: Challenges and Strategies on Friday, March 23, 2018 at the NASC Complex, Pusa, New Delhi. 

This theme is selected in view of the recent budget speech by the Finance Minister to fix the Minimum Support Prices (MSPs) at 50 percent higher than the production cost, and develop effective mechanisms to ensure remunerative prices to the farmers. Increasing MSP at 50 percent higher than the production cost was long awaited demand by the farmers. The moot issue is how to implement the higher MSP for all the crops. It is in this context, this policy dialogue is planned to develop alternative and feasible options, so that farmers get remunerative prices.

The event will also be marked by the release of the Global Food Policy Report 2018.  The report looks at the impacts on food security and nutrition of greater global integration – including the movement of goods, investment, people, and knowledge – and the threat of current antiglobalization pressures. The report will be launched by Dr Shenggen Fan, Director General IFPRI along with other reputed dignitaries.


More details about the launch event can be found here.

 

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