A consolidated reply of experiences and examples shared by various members of the Solution Exchange Water Community
From Nitya Jacob, United Nations Children’s Fund (UNICEF), New Delhi
Posted 10 June 2009
From Subhash Chandra Garg, National Bank for Agriculture and Rural Development (NABARD), Uttarkashi, Uttarakhand
Posted 15 April 2009
I work as District Development Manager, NABARD in Uttarkashi District of Uttarakhand and closely monitor the problems related to microfinance arrangements for minor irrigation being faced by the small and marginal farmers. In Uttarakhand, there is a practice of cultivating on leased lands by poor SHG members including women groups on crop sharing basis. Often, these poor farmers are out of the formal financial system. They do not have Kisan Credit Card for meeting their short term credit requirements. These SHG members do not have land title and often depend upon commission agents (Aadatiyas) for inputs and for getting irrigation facilities.
As per the National Water Policy (NWP) 2002 document, in terms of water allocation priorities, irrigation is the second priority area after drinking water. Irrigation being the largest consumer of fresh water, the aim has been to get optimal productivity per unit of water. The irrigation potential through major, medium and minor irrigation projects is increasing steadily. It has increased from 22.6 million hectares (mha) in 1951 to about 102.77 mha at the end of the 10th Five-Year Plan.
In irrigation planning, cost-effective irrigation options, and appropriate irrigation technology for optimal use of water has been the key issues of concern of government, NGOs and international organizations. Disparities in the availability of water between head-reach and tail-end farms and between large and small farms need to be obviated by adoption of a rotational water distribution system and supply of water on a volumetric basis subject to certain ceilings and rational pricing. Scientific water management, farm practices and sprinkler and drip system of irrigation are being adopted in different parts of the country.
Small and marginal farmers in hilly and remote areas of Uttarakhand face several problems related to irrigation of their small land holdings: use of water for irrigation, microfinance availability for infrastructure facilities and implements. In this context, we would like to request members to share:
- Experiences of existing arrangements of micro financing from Government and other agencies for minor irrigation
- Examples of schemes, projects and programmes of micro financing for individuals as well as Groups for use in minor irrigation and community based water management systems
- Experiences of community based water management systems and innovative technologies/processes of irrigation in India and other developing countries, especially adopted in mountain and remote areas
Your suggestions will help us to formulate a strategy and innovative programs for supporting small and marginal farmers in providing microfinance services for irrigation through banks/MFIs. It will also guide line department and NGOs of Uttarkashi for developing better community based water management systems.
Responses were received, with thanks, from
1. Prakash Kumar, Consultant, Ranchi
2. G. K. Agrawal, Rural and Microfinance Consultant, Mumbai
3. Hemantha Kumar Pamarthy, Hand in Hand Microfinance Limited, Chennai
4. Indu Chandra Ram, Iraq Personnel Support Services ( Iraq PSS) Project, Baghdad , Iraq
5. Abhinandan, Jawaharlal Nehru University , New Delhi
6. Arun Jindal, Society for Sustainable Development, Karauli, Rajasthan
7. Girija Srinivasan, Consultant, Pune
8. Abhishek Mendiratta, Consultant, New Delhi
9. Sanjay Verma, PrimeNET Consulting Group, Lucknow
10.P. S. M. Rao, Rural Livelihoods and Microfinance Consultant, Hyderabad
11.Shailja Kishore, Aga Khan Rural Support Programme ( India ), Ahmedabad
12. Ravinder Yadav, New Delhi
13. Jay Prakash Lall, Agricultural Finance Corporation Ltd., Mumbai
14. Ramakrishna Nallathiga, Centre for Good Governance, Hyderabad
15. N. Jeyaseelan, Helping Hand Micro Finance and Services, Kancheepuram, Tamil Nadu
16. Puran Singh Yadav, Haryana Institute of Rural Development, Karnal
17. Sanjeev Kumar, The Goat Trust, Lucknow *
18. Bhupal Neog, Livelihoods Improvement Finance Company of Meghalaya (LIFCOM), Meghalaya *
19. P. Uday Shankar, Microfinance Consultant and Trainer, Coimbatore *
Summary of Responses
Comparative Experiences
Related Resources
Responses in Full
Summary of Responses
Recognizing the importance of microfinance for minor irrigation, members shared microfinance initiatives of Government, NABARD, Banks and NGOs, elaborated successful community based water management systems and also suggested innovative ways to provide micro financing services to small and marginal farmers.
Challenging the basic definition of ‘Farmers’, respondent highlighted that the small and poor farmers who does not own land and generally cultivate under traditional system of land lease are eliminated from the mainstream agricultural promotion programmes. They are not able to get benefit of kisan credit card and also support available for seed and irrigation and training etc. Respondents opined that the existing microfinance (MF) products generally do not suit the needs of these people as the loan size is not adequate and repayment term is short.
Members argued that usually the minor irrigation works are more capital intensive compared to other farm interventions which require short term loans. Since the loans for micro-irrigation are capital intensive and cash inflows in agriculture is seasonal therefore members suggested for introducing long term loans and customized loan products for small and marginal farmers. Members gave example of IFAD’s MF programme in Bangladesh which provides arrange of products and flexible repayment options-bullet payment, periodic installments etc. to the farmers.
Deliberating on the existing arrangements of micro financing, members highlighted NABARD’s refinancing support for irrigation and watershed development schemes. They informed that these have been individual based schemes or lift irrigation schemes which involve large number of farmers of a particular command area. Members further familiarized that NABARD realized the problems of tenant cultivators and small farmers and introduced innovative scheme of financing to Joint Liability Groups (JLGs). The scheme has a provision of group financing as well as financing individuals in the groups, through various banks.
Commenting on the mega programme of rural development - Swarna Jayanti Gram Swarozgar Yojna (SGSY) in context of financing for micro-irrigation, respondents informed that farmer groups are being financed for lift irrigation, tube well, dug well, pump sets and pipelines. In majority of cases, the assets are owned by the groups with a clear agreement about their usage and management. Moreover, members shared that Watershed Development Projects and Tribal Development Area Projects have encouraged the small farmers to form water user groups and women members to form SHGs for undertaking activities like raising nurseries and kitchen gardens. They stressed that the loan products offered by the financial institutions have to be backed up by business development services as it is done by International Development Enterprises (IDE).
Enumerating the examples of financing the irrigation systems and deepening of existing wells, members recommended referring to the work done by Non Governmental Organizations like Professional Assistance for Development Action (PRADAN), Bhartiya Agro industries Foundation (BAIF), Watershed Organisation Trust (WTOR), PRERNA and Sewa Mandir. They also mentioned Arghyam’s initiatives of providing solutions for basic water needs in Southern India.
Additionally, respondents discussed about both centrally sponsored schemes as well as state specific schemes and suggested looking at – National Watershed Development Project in Rainfed Areas (NWDPRA) Uttarakhand Decentralized Watershed Development Project, Uttar Pradesh Water Sector Restructuring Project, Chhattisgarh Irrigation Development Project, Watershed Development project in Shifting Cultivation Areas (WDPSCA) (North East Region), River Valley Project (RVP), Flood Prone River project, Hariyali and Indira Mahila Samekit Vikas Yojna (Uttarakhand), Orissa Integrated Irrigated Agriculture. They also referred to DFID funded Andhra Pradesh Rural Livelihood Project (APRLP) in context of interventions in watershed management.
Respondents shared experience of an innovative project implemented by Centre for Promoting Sustainable Livelihood (CPSL), Patna applying dialectic approach in micro financing. The project is carried out in partnership with Indian Council of Agricultural Research (ICAR), GYA England and supported by Department for International Development (DFID).This approach has enabled poor to graduate themselves from small savers to credit-worthy borrowers of banks and MFIs.
Referring to the Sodic Land Reclamation project in Uttar Pradesh aimed at improving the water availability to farms, members informed that Farmer User Groups (FUGs) formed under the project, undertook savings and credit activities for - generating resources for maintenance of assets and providing emergency and crop loans.
Members also highlighted the issue of sustainability beyond project periods of these initiatives. They shared that wherever responsibility of monitoring and conflict resolution of the groups is given to larger community institutions, the sustainability levels are high. Alternatively, facilitating NGOs also sign MoUs with the groups to provide hand holding support including conflict resolutions. Hence in both the cases a long term self- sustainable system is formed.
Respondents highlighted a well known community based watershed management model of Ralegan Siddhi Village in district Ahmadnagar, Maharashtra where the revolving funds for soil and water conservation are managed by the village development committees. They quoted another example of Village Hiware Bazar from the same district wherein through an NGO – Yashwant Agri Watershed Development Trust irrigation facilities are managed. They added few more examples of Jhabua(DRDA initiative), Sukhomajari, Bunga and other places of Shivaliks in Madhya Pradesh.
Discussing about different schemes and programmes in Uttarakhand including Indira Mahila Samekit Vikas Yojna, members informed that the user groups/SHGs used multiple sources such as their own savings, revolving loan funds and other financial assistance/loans mobilized through Swarnajayanti Gram Swarojgar Yojna (SGSY) and Rashtriya Mahila Kosh (RMK) for minor irrigation. They informed that members arranged plastic pipes to link their field with the sources of water and as a result could diversify their crops and take up off season vegetables.
Commenting on Pani Panchayats organizational mode practiced in Maharashtra and Orissa to develop, maintain and operate lift irrigation projects, members felt that the financial modality is crucial as some banks in Maharashtra extended single loans to the Pani Panchayats on mortgage of the village land and in many cases it turned into Non-Performing Assets for the banks. The default by few members had made it difficult for others to redeem their mortgaged lands.
Lift irrigation systems in Karnataka and Maharashtra has been supported partly by grants and partly by loans and has been a success in Karnataka. Lift irrigation systems both common and individual has been successful and supported by local banks and financial institutions. Respondents shared an experiment funded by Swiss Agency for Development and Cooperation (SDC) in Beed district of Maharashtra in context of using Revolving funds for providing interest free loans through Village Development Committees (VDC). Another example mentioned was participatory irrigation management and lift irrigation scheme in Gujarat where SHG members are availing loans for installing bucket drip in their kitchen gardens and plantations.
Members also highlighted that the states like Madhya Pradesh, Chhattisgarh, Orissa, Maharashtra etc. have empowered the Water User Associations (WUAs) by endorsing the acts along with rules and regulations. Highlighting the innovative experiments of rain water harvesting in mountain regions, members shared the work of Practical Action and The Energy Resources Institute (TERI) and suggested MFIs to explore such opportunities as a part of financial inclusion process.
Finally, members recommended exploring Public Private Partnership arrangements, MFIs– manufacturer-dealers linkage model and micro leasing products for providing irrigation equipments to poor. Members suggested introducing innovative products and loan repayment schedules and enhancing the present ceiling of microfinance loans from fifty thousand rupees to one lakh for the benefit of small and marginal farmers.
Comparative Experiences
Bihar
Centre for Promoting Sustainable Livelihood (CPSL) ensures Links with Formal Banking Sector for Farmers, Patna (from Prakash Kumar, Consultant, Ranchi)
CPSL has addressed the credit needs of landless and poor farmers by adopting an approach that enables poor people to make a move from making very small savings in a group fund to achieving links with the formal banking sector. By doing so they have become credit-worthy borrowers from banks and other microfinance institutions. This has enabled farmers to get credits for community based water management projects for agricultural purposes. Read more
Gujarat
Participatory Irrigation Management Scheme Provides Loans for Minor Irrigation for Plantations (from Shailja Kishore)
Participatory Irrigation Management and Lift Irrigation schemes, managed by the community, have been provided by the Development Support Centre (DSC), Aga Khan Rural Support Programme India (AKRSP) in Gujarat. As a result, in the AKRSP programme villages, under the drought coping and salinity theme, the women from the SHGs have been able to take loans from the groups for installing bucket drip in their kitchen gardens, and plantations. Read more
From Abhishek Mendiratta, Consultant, New Delhi
Maharashtra
Revolving Funds Created for Financing Minor Irrigation Projects, Beed District
Until Jan Vikas and Action for Food Production (AFPRO) started funding interventions, the land was kept unutilized by families due to lack of funding assistance. Under the project, they created a revolving fund for soil and water conservation activities, with provision of interest free loans. This fund was used for minor irrigation facilities. The revolving funds were managed entirely by the Village Development Committees (VDC) and the repayments were good. Read more
Hiware Bazar Shows the Way for Community Managed Minor Irrigation Facilities, Ahmednagar District
Hiware Bazar has emerged as a new role model in community management of natural resources and groundwater. The Sarpanch, Popat Pawar, formed an NGO, Yashwant Agri Watershed Development Trust, here. The trust undertook building of earthen check dams, percolation tanks and concrete check dams through community participation. As a result, through community participation, minor irrigation facilities were managed in the village.
Community-Based Water Management Leads to Village Prosperity, Ahmednagar District (from Puran Singh Yadav, Haryana Institute of Rural Development, Karnal)
Since 1975, the village of Ralegaon Siddhi has been led by Anna Hazare. During that time, the village carried out a range of programmes, including terracing to reduce soil erosion and digging canals to retain rainwater and other watershed activities. As a result of these community-led initiatives, the village is now quite prosperous and is serving as a model for community participation, rainwater harvesting, environmental conservation and economic revival.
Uttar Pradesh
User Groups of Farmers Formed for Accessing Credits Witnesses Conflicts, (from Girija Srinivasan, Consultant, Pune)
Under the Usar Land Reclamation Project user groups of farmers were formed for accessing credits for minor irrigation. Some of the groups were linked with banks for availing credit for a variety of purposes, including pipelines for individual farms. The experience of group ownership has been varied. Conflicts among members are common. Thus, the facilitating NGO had to enter into MOUs with these groups to provide hand-holding support, including conflict resolution.
Uttarakhand
Indira Mahila Samekit Vikas Yogna Improves Livelihood Conditions (from Jay Prakash Lall, Agricultural Finance Corporation Ltd., Mumbai)
Under the Indira Mahila Samekit Vikas Yojna roof water harvesting was a key component and SHGs were provided with revolving funds for improving agriculture production system. Group members arranged plastic pipes from the revolving funds for conveying the irrigation water from sources to fields. As a result, there was crop diversification and the area under vegetable cultivation was improved resulting in improved socio-economic and livelihood conditions.
All India
Microfinancing for Minor Irrigation and Watershed Development (from G. K. Agrawal, Rural and Microfinance Consultant, Mumbai)
NABARD has been providing refinancing support for minor irrigation programmes and watershed development schemes. Most of the minor irrigation programmes are supported on an individual basis. Costing is distributed on the basis of land holding and cost recovered in the form of water charges from farmers. It has formulated a scheme to finance Joint Liability Groups of tenant farmers. These schemes have enabled farmers to access micro finance for irrigation projects.
Commonly Owned Micro Finance Schemes for Minor Irrigation Projects Provided through Swarnjayanti Gram Swarozgar Yojna (from Girija Srinivasan, Consultant, Pune)
As part of the Swarnjayanti Gram Swarozgar Yojna (SGSY), poor and marginal farmers have been able to access micro finance for funding watershed works. This has helped financed lift irrigation, tube well, dug well, pump sets and pipelines for minor irrigation purposes. These investments are commonly owned, with a clear agreement with the farmer groups on how these investments will be managed. Some of these schemes are working well with a good repayment record.
Related Resources
Recommended Documentation
National Water Policy (from Sanjay Verma, PrimeNET Consulting Group, Lucknow)
Policy Document; by Ministry of Water Resources; New Delhi; 2002;
Available at http://wrmin.nic.in/writereaddata/linkimages/nwp20025617515534.pdf (PDF; Size: 60 KB)
Provides a framework for planning, development and management of water resources, with an emphasis on augmenting water resources with the growing agricultural needs
From Ramakrishna Nallathiga, Centre for Good Governance, Hyderabad
Revised Selection Criteria for Livelihood Watersheds and Project Implementation Agencies: Volume 5 - Strategies and Practices
Report; by Andhra Pradesh Rural Livelihoods Programme (APRLP); Government of Andhra Pradesh; Hyderabad; 2002;
Available at http://www.rd.ap.gov.in/aprlp/Publications/Volume-5.pdf (PDF; Size: 1.72 MB)
Provides selection criteria developed by APRLP for micro financing minor irrigation and watershed development projects in Andhra Pradesh
The Andhra Pradesh Rural Livelihoods Project Hope:
Book; by Andhra Pradesh Rural Livelihoods Programme (APRLP) and Department for International Development (DFID); Government of Andhra Pradesh; Hyderabad
Available at http://www.rd.ap.gov.in/aprlp/Publications/Hope_CaseStudies_BK.pdf (PDF; Size: 1.91 MB)
Provides case studies of how micro financing for agriculture and watershed projects in Andhra Pradesh has proved beneficial for several marginal and poor farmers
From Sunetra Lala, Research Associate
Hiware Bazaar: Community Stewardship of Water Resources
Article; by Nikhil Anand; India Water Portal; Maharashtra ; July 2007
Available at http://www.indiawaterportal.org/tt/wbr/case/seed_watr.pdf (PDF, Size: 344 KB)
Describes how community management of natural resources led to groundwater conservation and water harvesting, which helped to mitigate water shortages
Ralegaon Sidhi
Article; Wikipedia; 7 August 2008
Available at http://en.wikipedia.org/wiki/Ralegaon_Siddhi
Describes how the village of Ralegaon Sidhi, Maharashtra has set an example for water harvesting, watershed management and overall rural development
Understanding Microfinance
Book; by Debadutta K. Panda; Wiley-India; New Delhi; March 2009;
Available at http://wileyindia.com/index.php?page_id=bookdetails&id=9788126519446
Analyzes the role of microfinance and microfinance institutions and scans various microfinance lending models practiced throughout the world, and in India
Beyond Micro-credit: Putting Development Back into Micro-Finance
Book; by Thomas Fisher, M. S. Sriram and Malcolm Harper; Sage Publications; New Delhi; 2002; Available at
http://books.google.co.in/books?id=jfBnBtxmPUwC&dq=AGRICULTURE+AND+MICROFINANCE%2BBOOK
Provides comprehensive analysis of Indian innovation and practice in microfinance, including analysis of the "self-help groups" in India
The Transformation of the Microfinance Sector in India: Experiences, Options, and Future
Article; by M. S. Sriram and Rajesh S. Upadhyayula; Journal of Microfinance; Brigham Young University; USA
Available at http://www.iimahd.ernet.in/~mssriram/jmf.pdf (PDF; Size: 180 KB)
Describes how the strength of the micro finance organizations in India is in the diversity of approaches and forms that have evolved over time
Microfinance Systems: Designing Quality Financial Services for the Poor
Book; by Graham Wright; Zed Books; USA; 2002;
Available at
http://www.amazon.com/Microfinance-Systems-Designing-Financial-Services/dp/1856497887
Outlines cutting edge issues such as how far micro-finance can contribute to reducing poverty with case studies, detailing how two very different systems were developed
Recommended Organizations and Programmes
From Jay Prakash Lall, Agricultural Finance Corporation Ltd., Mumbai
Swarnjayanti Gram Swarozgar Yojana, New Delhi
Ministry of Rural Development, Krishi Bhawan, Dr. Rajendra Prasad Road, New Delhi 110001; Tel: 91-11-23384467; Fax: 91-11-26888254; minoffice@nic.in; http://www.rural.nic.in/sgsy.htm
Provides assistance to poor families through funding opportunities for several activities, including watershed development and minor irrigation projects
Rashtriya Mahila Kosh, New Delhi
Ministry of Women and Child Development, 1, Abul Fazal Road, Bengali Market, New Delhi 110001; Tel: 91-11-23354619; Fax: 91-11-23354621; ed_rmk@nic.in; http://rmk.nic.in/newscheme.htm
Provides credit for assisting women in agriculture related activities, including irrigation facilities, crop production, land improvement, post harvest infrastructure, etc
Indira Mahila Samekit Vikas Yojana, Uttarakhand
Department of Women and Child Development, Dehradoon 248001, Uttarakhand; Tel: 91-1375-223235; Fax: 91-135-2666380; sio-ua@nic.in; http://www.uttaranchaleducation.net/rd.asp?url=http://gov.ua.nic.in/
Aims to build the capacity of existing SHGs, promotes credit-based activities and connects SHGs to microfinance institutions for irrigation projects
From Shailja Kishore, Aga Khan Rural Support Programme (India), Ahmedabad ,
NM Sadguru Water Development Foundation, Gujarat
71, Dahod 389151, Gujarat; Tel: 91-2673-238601; Fax: 91-2673-238604; nmsadguru@yahoo.com; www.nmsadguru.org
Has provided micro finance for drip irrigation and community managed water systems projects in the Dahod Panchmahal districts of Gujarat
Aga Khan Rural Support Programme (India), Gujarat
9th -10th Floor, Corporate House, Opposite Dinesh Hall, Off Ashram Road, Ahmedabad 380009; Tel: 91-79-66312451; Fax: 91-79-66312471; kishore@akrspi.org; http://www.akdn.org/india_rural.asp; Contact Shailja Kishore; Programme Specialist (Research and Monitoring); Tel: 91-79-27541678; kishore@akrspi.org
Has helped women SHG members to access micro finance schemes for minor irrigation, watershed development, and plantation
From Sanjay Verma, PrimeNET Consulting Group, Lucknow
Uttarakhand Decentralized Watershed Development Project, Uttarakhand
Watershed Management Directorate, Indira Nagar Forest Colony, Dehradun 248006; Tel: 91-135-2768712; Fax: 91-135-2762839; wmd@vsnl.com; http://www.gramya.in/about_the_project.html
Involves communities in its participatory approach of forming Water User Associations for accessing micro finance for minor irrigation schemes
Minor Irrigation and Underground Water Department, Uttarakhand
Watershed Management Directorate, Indira Nagar Forest Colony, Dehradun 248006; Tel: 91-135-2644915; Fax: 91-135-2721187; http://www.uttara.in/minor_irrigation/intro.html
Its objective is to judiciously use available water resources of Uttarakhand to provide appropriate irrigation facility for agricultural purposes
From Abhishek Mendiratta, Consultant, New Delhi
Swiss Agency for Development and Cooperation (SDC), New Delhi
Chandragupta Marg, Chanakyapuri, New Delhi 110021; Tel: 91-11-26877819; Fax: 91-11-26873631; delhi@sdc.net;www.sdcindia.in
Implemented a micro finance scheme involving revolving funds for watershed development and minor irrigation projects in Maharashtra
Action for Food Production, New Delhi
25/1-A Pankha Road, D-Block, Janakpuri, New Delhi 110058; Tel: 91-11-8525452; Fax: 91-11-28520343; afprodel@afpro.org;http://www.afpro.org/programs.htm
Provides technical support to a rural drinking water and sanitation programme- Jalswarajya, and has also implemented micro finance projects for minor irrigation
Jan Vikas Society, Mumbai
Mermier Bal Ashram, Plot No 18 A, Sector 11, Bonkode Road, Koparkhairane, Navi Mumbai 400709; Tel: 91-22-27543335; Fax: 91-22-27544524; mermierbalashram@gmail.com; http://www.mermierbalashram.org/
In the Beed district of Maharashtra it implemented a micro finance project, involving revolving funds, which helped farmers to access credits for irrigation purposes
Watershed Development Project in Shifting Cultivation Areas, New Delhi(from Abhinandan, Jawaharlal Nehru University, New Delhi)
Department of Agriculture and Cooperation, Ministry of Agriculture, Krishi Bhavan, Dr. Rajendra Prasad Road New Delhi 110001; Tel: 91-11-23782691; Fax: 91-11-23384129; am.krishi@nic.in; http://agricoop.nic.in/faq/rfsFaqs.htm
Activities undertaken in this programme include micro finance for soil and moisture conservation, measures like construction of check dams, water harvesting structures, etc
World Bank, New Delhi(from Indu Chandra Ram, Iraq Personnel Support Services (Iraq PSS) Project, Baghdad)
69-70, Lodi Estate, New Delhi 110003; Tel: 91-11-24610210; Fax: 91-11-24619393; EDS01@worldbank.org;http://www.worldbank.org.in/WBSITE/EXTERNAL/COUNTRIES/SOUTHASIAEXT/INDIAEXTN/0,,menuPK:295589~pagePK:141159~piPK:141110~theSitePK:295584,00.html
Documented the success story of a minor irrigation scheme implemented in Uttar Pradesh in four hectares of land with one shallow bore well
From Prakash Kumar, Consultant, Ranchi
Indian Council of Agricultural Research, New Delhi
Krishi Bhavan, Dr. Rajendra Prasad Road, New Delhi 110 114; Tel: 91-11-23382629; Fax: 91-11-25843285; mrai.icar@nic.in;http://www.icar.org.in
Apex body for coordinating, guiding and managing research and education in agriculture, and it supported a micro finance project for landless and poor farmers
Centre for Promoting Sustainable Livelihood, Bihar
Karpoora Moon Palace, Flat No 107, Road No 37, Chitkohra, Anishabad, Patna 800002; Tel: 91-9431012521; cpslbihar@sify.com; www.rojiroti.org
Organization promotes innovative approaches to community development, including community level micro financing for irrigation projects
Department for International Development, New Delhi
B-28 Tara Crescent, Qutab Institutional Area, New Delhi 110016; Tel: 91-11-26529123; enquiry@dfid.gov.uk;http://www.dfid.gov.uk/Where-we-work/Asia-South/India/
Initiated a project in Bihar which has enabled farmers to access microfinancing for minor irrigation projects at the community level
National Bank for Agriculture and Rural Development, Mumbai (from G. K. Agrawal, Rural and Microfinance Consultant, Mumbai)
Plot No. C 24, G Block, Bandra-Kurla Complex, PB Number 8121, Bandra (E), Mumbai 400051; Tel: 91-22-26530063; Fax: 91-22-26530192; pro@nabard.org; http://nabard.org/
An apex Development Bank which facilitates credit for promotion and development of agriculture, and has several micro finance schemes for the same
From Hemantha Kumar Pamarthy, Hand in Hand Microfinance Limited, Chennai
Rajiv Gandhi Drinking Water Mission, New Delhi
Department of Drinking Water Supply, Ministry of Rural Development, Government of India, Room No. 247, A Wing, Nirman Bhavan, New Delhi 110003; Tel: 91-11-23061245; Fax: 91-11-23062715; secydws@nic.in; http://ddws.gov.in
The Mission aims at providing safe and adequate drinking water to the rural population by supplementing the efforts made by the State Governments/UTs
Professional Assistance for Development Action (PRADAN), New Delhi
Post Box No.3827, 3 Community Shopping Centre, Niti Bagh, New Delhi 110049; Tel: 91-11-26518619; Fax: 91-11-26514682; headoffice@pradan.net; http://www.pradan.net//index.php?option=com_content&task=view&id=42&Itemid=28
Extends assistance in finding opportunities to enhance livelihoods, particularly related to agriculture by providing micro finance to farmers
BAIF Development Research Foundation, Pune
Dr. Manibhai Desai Nagar, Warje, Pune 411058; Tel: 91-20-25231661; Fax: 91-20-25231662; baif@vsnl.com; http://www.baif.org.in/aspx_pages/prog_water_rec.asp
Has taken up innovative micro finance projects to address water resource development and conservation of village common lands for sustaining the interest of small farmers
Watershed Organisation Trust (WOTR), Ahmednagar
'Paryavaran', Behind Market Yard, Ahmednagar 414001; Tel: 91-241-2450188; Fax: 91-241-2451134; info@wotr.org;http://www.wotr.org/projects.html
A premier institution in the field of participatory watershed development, provides micro finance opportunities and capacity building for farmers
Seva Mandir, Rajasthan
Old Fatehpura, Udaipur 313004, Rajasthan; Tel: 91-294-2450960; Fax: 91-294-2450947; info@sevamandir.org;www.sevamandir.org
Undertakes development activities related to microfinancing watershed development in order to strengthen local livelihoods and village institutions
Lok Prerna, Jharkhand
Aarti Bhawan, Court Road, Deoghar 814112, Jharkhand; Tel: 91-6432-275299; Fax: 91-6432-275299; lokprene_skk@yahoo.co.in; http://www.lokprerna.org/Overview.html
Works in Jharkhand to empower communities by providing micro finance for watershed development and irrigation projects, agriculture development, rainwater harvesting, etc
Arghyam, Bangalore
599, 12th Main, Indiranagar, HAL 2nd Stage, Bangalore 560008, Karnataka; Tel: 91-80-41698941; Fax: 91-80-41698943 info@arghyam.org; http://arghyam.org/
As a small funding agency, it supports strategic and sustainable efforts for basic water needs by providing micro finance for small irrigation projects
International Fund for Agricultural Development (IFAD), New Delhi (from N. Jeyaseelan, Helping Hand Micro Finance and Services, Kancheepuram, Tamil Nadu)
2, Poorvi Marg, Vasant Vihar, New Delhi 110057; Tel: 91-11-46554000; Fax: 91-11-46554055 s.subramanium@ifad.org; http://www.enrap.org.in/ongoing.asp
Supports SHGs in India through micro financing for agriculture, watershed development, minor irrigation and other activities
From Bhupal Neog, Livelihoods Improvement Finance Company of Meghalaya (LIFCOM), Meghalaya
The Energy Resources Institute (TERI), New Delhi
Darbari Seth Block, IHC Complex, Lodhi Road , New Delhi 110 003; Tel: 91-11-24682100; Fax: 91-11-24682144;mailbox@teri.res.in; http://www.teriin.org/index.php?option=com_ongoing&task=level
Aims to create an enabling environment for development of solutions to global problems in the fields of energy, environment and patterns of development
International Development Enterprise – India, New Delhi
C 5/43, (1st & 2nd Floor), Safdarjang Development Area, New Delhi 110016; Tel: 91-11- 46000400; Fax: 91-11-46000444; mailbox@ide-india.org; http://www.ide-india.org/ide/product-technologies.shtml
Develops affordable, appropriate and environmentally sustainable technologies to small and marginal farm families through private marketing channels
International Centre for Integrated Mountain Development, Nepal
G.P.O. Box 3226 , Khumaltar, Kathmandu , Nepal ; Tel: 977-1-5003222; Fax: 977-1-5003299; info@icimod.org;http://www.icimod.org/?page=prog
A regional knowledge development and learning centre aims to assist mountain people to understand effects of globalization and climate change on mountain ecosystem
Practical Action, United Kingdom
The Schumacher Centre for Technology & Development, Bourton on Dunsmore, Rugby , CV23 9QZ , United Kingdom ; Tel: 44-0-1926634400; Fax: 44-0-1926634401; practicalaction@practicalaction.org.uk; http://practicalaction.org/?id=water_and_sanitation
Works with poor communities to helps them in using the technology to improve their lives
Related Consolidated Replies
WUAs and Water Rights in Irrigation Management, from Atreyee Majumder, International Environmental Law Research Centre, New Delhi (Experiences). Water Community and Food and Nutrition Security Community, Solution Exchange India,
Issued 26 March 2008. Available at http://www.solutionexchange-un.net.in/environment/cr/cr-se-w es-food-08020801.pdf(PDF, Size: 178 KB)
Shares experiences from various states to set up WUAs in PIM, suggests ways to overcome inherent challenges in ensuring water rights and groundwater management
Responses in Full
Prakash Kumar, Consultant, Ranchi
Mr. Garg has raised an issue, which I think first needs to be clearly seen in terms of what is the primary issue and what are other related issues. I feel that we have to think, whether it an issue related to irrigation technique? Or is it related to financing?
It is not surprising that small and marginal farmers in Uttarakhand cultivate on leased land. Leasing is informal in nature and farmers are heavily dependent on informal credit system. Moreover, similar situation exists in Bihar , Jharkhand, Chhattisgarh, Uttar Pradesh and Madhya Pradesh. Mr. Garg has very correctly cited that small and marginal farmers are generally not covered under the institutional credit system.
Now what are the probable reasons for this? The answer to this is hidden into the agricultural and credit policies of our nation itself. Let’s begin with basic issues:
- Who can be termed as a farmer - Policies define farmer as a person on the basis of the amount of the land that he/she cultivates, which actually means ownership of land and having land titles. In context of leased cultivation, this needs to be proven through formal lease agreement. This definition is used as basic parameter for endowment of agriculture benefit programmes, like kisan credit card, support for seed and irrigation and training etc. Now, a small and poor farmer who does not own land and generally cultivate under traditional system of land lease (example share-cropping), won’t fit into this definition and therefore automatically gets eliminated from the mainstream agricultural promotion programmes.
- Credit - Mainstream institutional credit are generally doled out either through collaterals or through a system of loosely defined method of guarantees. Here the poor farmers do not fare well as they are rarely in a position to give collaterals or guarantee anything. In context of institutional break-through that has taken place for credit access for small and marginal farmers, here also the basic definition of farmer pose a major challenge. Landless farmers face challenge in proving themselves as farmers in front of authorities to access credit benefits.
- Micro-finance - Microfinance to some extent have catered to the problems of poor landless farmers but here also the sector has not been successful in replacing the informal credit market. Microfinance institutions still have not been able to penetrate into the short term and very small credit demand of poor farmers. Here the major bottleneck has been the productive and non-productive approach of defining credit products. Also, investment among small farmers is generally considered high risk prone and till now has not been able to find place in the business plans of Microfinance Institutions.
Above issues leave no option for landless and poor farmers but to rely on the costly informal credit support for cultivation. This limits their capacities to invest properly into cultivation, especially in terms of technology and methods.
No matter how innovative and effective any irrigation technique may be, it comes at a cost and this cost becomes the defining parameter for its access by the intended target beneficiary. If the beneficiary group does not have the capacity to bear the cost, it does not have any meaning. The present institutional system of credit does not enable poor farmers to bear this cost and the informal credit support system is too costly for accessing such kind of facilities.
To address two basic questions asked in the beginning, I feel that the issue is primarily related to financing. Financial empowerment will naturally lead to the irrigational innovation that Mr. Garg has talked about and there is no dearth of technology innovations, the only thing required is financial break through.
Here, I would like to share innovations in micro financing practiced by Centre for Promoting Sustainable Livelihood (CPSL), Patna . CPSL is innovatively addressing credit need of landless and poor farmers. The organisation has adopted the dialectic approach for community development. This approach has enabled poor people to move in a short time from making very small savings in a group fund to achieving links with the formal banking sector and becoming credit-worthy borrowers from banks and other microfinance institutions. The project is carried out in partnership with Indian Council of Agricultural Research (ICAR), GYA England and supported by Department for International Development (DFID) under Research into Use (RIU) Programme. For more information on the approach of CPSL, please visit: www.rojiroti.org
G. K. Agrawal, Rural and Microfinance Consultant, Mumbai
Supporting and financing of minor irrigation, community based water management schemes, both on individual basis/group basis have been the priority for Government, National Bank for Agriculture and Rural Development (NABARD) and banks.
NABARD has been providing refinancing support for minor irrigation programmes and watershed development schemes as one of its priority programmes. However, most of the minor irrigation programmes are supported on individual basis, or as lift irrigation schemes involving large number of farmers coming in the command area of the respective scheme. Costing in the latter is distributed on the basis of land holding and cost recovered in the form of water charges from farmers.
Since loans up to Rs. 50,000 per loan account are termed as microfinance, all loans for minor irrigation, watershed development up to this amount can be clubbed as microfinance. However, in the strict sense of microfinance as per present context of group loaning, these may not be termed as microfinance.
To take care of financing problems of tenant cultivators who may not have rights over the land, NABARD has formulated a scheme to finance Joint Liability Groups (JLGs) of tenant/small farmers. These JLGs should primarily consist of tenant farmers and small farmers cultivating land without possessing proper title of their land. Banks may initially form JLGs by using their own staff wherever feasible. Banks may also engage business facilitators like NGOs and other individual rural volunteers to assist banks in promoting the concept and formation of groups. Government departments like Agriculture Department could also form JLGs of tenant farmers and small farmers not having clear land titles. The JLGs of such eligible farmers can also serve as a conduit for technology transfer, facilitating common access to market information, for training and technology dissemination of activities like soil testing, training, health camps and assessing input requirements.
Banks could finance JLGs by adopting any of the two models. Model A – Financing individuals in the group or Model B – Financing the group.
The JLGs could prepare a credit plan for its individual members and an aggregate of that can be submitted to the banks. Banks may evolve simple loan application for this purpose. The individual members of JLGs would be eligible for bank loan after the bank verifies the individual member’s credentials.
Finance to JLG is expected to be a flexible credit product addressing the credit requirements of its members including crop production, consumption, marketing and other productive purposes. Banks may consider cash credit, short-term loan or term loan depending upon the purpose of the loan.
In the Watershed Development Projects and Tribal Development Area Project areas, formation and financing of SHGs for various purposes including minor irrigation and credit worthy programmes are encouraged. In the watershed development project areas, water groups may be formed to share the cost and benefits on the group or individual basis. Women, besides being represented in the Village Water Committees, are encouraged to form SHGs and undertake project related activities like raising a nursery, kitchen gardens. In addition to these activities it has helped the women to inculcating the habit of thrift and funds management/rotation of funds amongst themselves. Women promotion/development activities are undertaken from a Women's Development Fund set up by earmarking 5% of the project measures.
With regard to the specific projects, instances and experiences, specific information may be available with NGOs working in mountain and remote areas. Also the information can be accessed through NABARD’s supported programmes.
Hemantha Kumar Pamarthy, Hand in Hand Microfinance Limited, Chennai
I would like to mention here that the credit of this response goes to Mr. Mageswaran. He has experience on this issue and has given his substantial support in sharing valuable information.
As many of us are aware that, minor irrigation system varies from category, region, location and type of land possessed. The systems can also follow traditional or modern methods and is quite subjective or relative. If the traditional systems are called johad/tank in Northern states, yeri in Tamil Nadu, kunta, cheruvu, yetam-baavi in Andhra Pradesh and so on. I am sure that the same could be called in different names in different states.
However, for individual irrigation some traditional systems such as bamboo based irrigation systems in North East, lift irrigation in North and the Western India are predominant. Wells are the most prominent system used for individual land based irrigation. Different types of wells exist based on the type of land and the culture of the region. The modern minor irrigation systems include sprinkler, drip irrigation, lift irrigation, and gravity based irrigation systems.
There is a large scope for micro financing in water sector in the following areas. Loans can be provided for digging open wells and tube wells, deepening existing wells, drip irrigation and sprinkler irrigation in horticulture crops and lift irrigation systems
Here I would like to focus on the questions raised in the query. Responding to the first question, my views are-
Financing for minor irrigation, especially common irrigation systems such as the tanks, johads, yeris are grant based and are financed by the government schemes and by NABARD.
However, the individual based minor irrigation systems are partly grant based, such as the drip irrigation system and sprinklers. These systems are supported by government schemes and subsidy is provided by the government (schemes under agriculture department, horticulture department and department of agricultural engineering). Loans are also available from some banks for these irrigation systems.
Loans can be availed from banks for the other irrigation systems such wells and tube wells. Some of the nationalized banks and agriculture and rural development banks (land development banks) could provide loans to these systems on collateral of land. In past, various schemes were launched for providing loans to dig wells. In addition, Million Wells scheme provided open irrigation wells to small and marginal farmers amongst the Scheduled Caste/Scheduled Tribes and freed Bonded Labourers who were below poverty line.
My response for question 2 and 3 is-
Community based water management systems were mainly functional in the traditional structures mentioned above. The modern version of the community based water management system was successful in the drinking water schemes, especially the Rajiv Gandhi Drinking Water Mission. But this scheme was grant based with contribution from the local people. The importance of the scheme is that it is to be managed locally by the people themselves.
Lift irrigation systems in Karnataka and Maharashtra has been supported partly by grants and partly by loans and has been a success in Karnataka. Lift irrigation systems both common and individual has been successful and supported by local banks and financial institutions.
Loan based watershed schemes were also introduced in Karnataka and Maharashtra , but was not successful and was converted as a grant based scheme.
Keeping in mind the future of mankind, there is a need for conserving water. Thus micro financing for minor irrigation could play a very significant role in not only developing the ground water tables, support agriculture but also will be life saving for nation.
Some activity in this regard seems to be taking place in India , especially in the central and northern India . NGOs such as Professional Assistance for Development Action (PRADAN), Bharatiya Agro Industries Foundation (BAIF), Watershed Organisation Trust (WOTR), PRERNA, Seva Mandir are financing irrigation systems, especially for deepening of existing wells. In Southern India, Arghyam supports strategic and sustainable efforts for basic water needs for all citizens.
Indu Chandra Ram, Iraq Personnel Support Services ( Iraq PSS) Project, Baghdad , Iraq
With regard to various schemes of Government of India on financing Minor Irrigation projects, I am sure NABARD has the updated information on this. Also, all such schemes are being evolved in close coordination with NABARD. There are a good number of schemes for financing minor irrigation including drip and sprinkler irrigation systems.
Responding to the second question raised in the query, I would like to suggest that strengthening of SHG to be taken as the core activity. SHGs should be democratically operational and financially sustainable before they are linked with bank for availing credit for undertaking group/community based minor irrigation scheme. If the projects are big in size, the mechanism of federation can be considered for successful implementation of such projects. For the sustainability of the project it is crucial that modalities of project identification, planning, implementation and monitoring and evaluation be left to the SHGs/community/federation. However, if there is any existing scheme SHGs must be well informed about the scheme and educate them to avail the benefits of such existing schemes.
I did not have experience in community based water management systems/innovative technologies that can be adopted in mountain or remote areas. However, my experience of minor irrigation scheme in Uttar Pradesh for Sodic Land Reclamation by promoting Water Users Groups (later converted into formal SHGs) in 4 hectares of land with one shallow bore well has been successful. It has been well documented by the World Bank and later on was made one of the components in water restructuring projects in various states of India.
Abhinandan, Jawaharlal Nehru University , New Delhi
My response for the query particularly referring to Northeast (especially Nagaland), I would like to place it in the following way-
Water availability is limited in the hills of Nagaland. Water is generally harvested during the time of monsoon. Small streams in the region satisfy the needs of the people. But maximum of these streams are seasonal and depends on monsoon.
Jhumias, depends on traditional farming system (traditional slash and burn agriculture) for their livelihood. Crops totally depend on monsoon due to the lack of irrigation facilities. Irrigation is required only for wet rice cultivation which is practiced often near the banks of rivers/tributaries. In some places where terrace cultivation is practiced, rain water is generally stored in earthen dams made in hills. Later it is channeled out to the downhill where terrace cultivation is practiced specially for growing paddy. Many a times, this artificial pond (the stock of rainwater) is used for fishery.
I would like to mention here that a central scheme - Watershed Development Project in Shifting Cultivation Areas (WDPSCA) is also implemented in Nagaland through different government departments.
Arun Jindal, Society for Sustainable Development, Karauli, Rajasthan
Finance for irrigation is a basic requirement of a farm owner. Farm owner may avail finance from various sources for irrigation facilities. Farmers may also opt for getting the irrigation equipments on lease.
Girija Srinivasan, Consultant, Pune
Mr. Garg's query relates to microfinance arrangements for minor irrigation and community managed irrigation works and experiences in community managed irrigation systems in mountainous region.
The response below relates to microfinance for minor irrigation.
Minor irrigation works are usually, more capital intensive than what a typical microfinance loan can offer. Microfinance loans are usually short term (from 12 to 24 months), available at higher band of interest rates (from 18 to 36 percent depending on institution's policy). Whereas, the farmer's cash flows usually require longer term financing. Given the risks involved in and falling profitability of farming, loans for minor irrigation will require reasonable interest rates. So, fitting microfinance in financing minor irrigation works requires examination and suitable modifications in the terms of loans.
(a) Financing can be provided to groups who own common assets and/or to individuals for microfinance investment at farm level. Under Swarnjayanti Gram Swarozgar Yojna (SGSY), some farmer groups have been financed for lift irrigation, tube well, dug well, pump sets and pipelines. Some are working well with good repayment record. These are investments which are commonly owned and with a clear agreement within the group members on how these investments will be managed.
Usar land reclamation project, Uttar Pradesh had formed user groups of farmers for the investments, the project aimed at improving water availability to the farms. The user groups undertook savings and credit activities primarily-
a. To keep the groups functional with on going activity
b. To generate resources for maintenance of the assets
c. To take short term credit for emergency and crop loans
Some of the groups were linked with banks for availing credit for a variety of purposes, including pipelines for individual farms.
The experience of group ownership has been varied and the sustainability beyond project period whether it is SGSY or others like Usar land reclamation project has been difficult. Conflicts among members are very common. It has been observed that, minor irrigation investments undertaken as part of larger community participating projects (such as watershed and land improvement), responsibility of monitoring the functioning of smaller groups was given to the larger community institutions. As a result, sustainability was higher. Another trend observed was that the facilitating NGO enters into MOU with these groups to provide on going hand holding support including conflict resolution. Groups paid for the services provided to them.
Financing of minor irrigation works at individual farm level through JLGs, SHGs has been undertaken for more than a decade now. These are usually successful, though these investments more often break the rules laid down by the government relating to water usage in dark and grey areas.
Abhishek Mendiratta, Consultant, New Delhi
My first observation on the issue of minor irrigation is that it is responsibility of the state government and local self governments to ensure the availability of water for irrigation, especially for marginal and small farmers. However, it is often seen that marginal and small farmers do not access irrigation facilities due to problems in getting finance for irrigation and knowledge about the technology innovations. Many a times, they are unaware about the process of availing the benefits of the government schemes.
Donor grants and loans are important financing sources for water infrastructure in India . The financing mechanism of community based water management systems is varying across the country. Some of the mechanisms are –
• Fund raising - In practice, it often refers to raising small grants from different well-off individuals, local organizations, business houses or service clubs and enterprises
• Co-financing options – Agencies providing grants frequently offer an option of co financing i.e. Public Private Partnerships. Under this arrangement, government provides funds for some irrigation projects and private agencies (mainly companies providing irrigation systems and implements) also share some cost
• Loans through Community Based Organizations (CBOs) – Some of the CBOs /SHG- federations lend to small groups of people or individuals in the community. Loans are given to savings and credit groups for on-lending to their members for various purposes, including irrigation. The loan installments and interest paid by members, strengthens the capital of these organizations, thereby enhancing their lending capacity
• Revolving Funds support - System of revolving loan funds is common in donor funded projects wherein revolving loan funds are provided to the groups/SHGs for various purposes. The funds generated out of the loan repayments, received from the groups are again used for lending to other groups. Here I would like to quote an example of Swiss Agency for Development and Cooperation (SDC) funded project, implemented by Action for Food Production (AFPRO) and a partner organization Jan Vikas, in Beed district of Maharashtra. It aims at rehabilitation of erstwhile degraded ‘community land’ which has now been allocated to landless dalit families. Till Jan Vikas & AFPRO started project interventions, the land was kept unutilized by the families due to lack of funding assistance. Under the project, they created a revolving fund for soil and water conservation activities, with provision of interest free loans. The revolving funds are managed entirely by the Village Development Committees (VDC) and therefore the repayments were good. For the first few years, VDC decided to use the funds for land development and infrastructure for water, providing interest free loans to the members. In this way revolving loan funds were used for irrigation facilities.
• Venture Capital - The water and sanitation sector is strongly influenced by public funding and involves high risk, the mechanism of venture capital is also in practice but to a limited extent.
Another example of developing community based water management systems is in the village- Hiware Bazar of Ahmednagar district, Maharashtra. This has emerged as a new role model in community management of natural resources and groundwater. It is located 17 kms from Ahmednagar, and surrounded by barren land and dry wells. The Sarpanch, Popat Pawar, decided to form an NGO - Yashwant Agri Watershed Development Trust, at the village level. The trust undertook plantation in the village through an integrated process and undertaken building of earthen check dams, percolation tanks and concrete check dams through community participation. In this way, through community participation, irrigation facilities were managed in the village.
Sanjay Verma, PrimeNET Consulting Group, Lucknow
I wish to respond this query in slightly different manner. First I would like to elaborate upon the requirement and status of irrigation in Uttarakhand, secondly what our constitution says on water, and lastly on specific points expressed in the query.
Microfinance perhaps is now being viewed as solutions for all problems. This is high time when we need to draw a line to segregate areas that are required to be covered under microfinance and those areas that should not be covered. We also need to discuss amongst ourselves that – Is farming being done by choice? Will a person/ farmer like to continue practicing agriculture if other options/choices are offered? Or, if at all one need to take credits/loans for business operations, will agriculture operations would be one of the choices?
As a farmer (specifically small and marginal with small and fragmented land holdings) one need to know why established systems are not supporting to make agriculture operations viable for small holdings. With all risks involved along with uncertain environment (climate and market) one is forced to take loans with all likelihood to push one to a debt trap knowingly or unknowingly through formal or informal sources as no choices are available for him or her. I am aware of examples where a farmer has taken loan to meet his/her cost share, and later the irrigation facility failed, leaving the farmer with debt burden. Where does the fault lie?
Why Minor Irrigation is necessary? Our land is fixed but the needs are increasing. As such we have no option but to make its optimum utilization and get maximum crop per acre. Irrigation is one of the means to achieve this goal. National Water Policy (2002) indicates that the production of food grains has increased from around 50 million tonnes in the fifties to about 208 million tonnes in 1999-2000. This will have to be raised to around 350 million tonnes by 2025.
As per ‘Farmer Minor Irrigation Charter’ the objective with Minor Irrigation and Underground Water Department of Uttarakhand is to judiciously exploit available water resources to provide appropriate irrigation facility for the agriculture land with the state’s small and marginal farmers. As per the available information about 80% of irrigation land is served by means of minor irrigation e.g. gool, hauz, hydrum, boring pump sets, surface pump sets, artisan, electric pump set, wells, government/ personal pump sets, diversion and wear etc. Realizing the importance of the minor irrigation, a department has been created by the Uttarakhand Government with 539 posts that includes Chief Engineer, 4 Superintendent Engineers, 14 Executive Engineers, 38 Assistant Engineers and 145 Junior Engineers. The total irrigation capacity created is for around 357147.871 hectare through gools (15287 kms), Hauz (22730), Pucca well (33), Hydrum (1383 units), Surface pumpset (150), boring/ pumpset (53531), deep well (688) and artisan (177).
Water in Indian Constitution - The Constitution of India lays down the legislative and functional jurisdiction of the Union , State and local Governments regarding Water. Under the Constitution, 'Water' is basically a State subject and the Union comes in only in the case of inter- state river waters. List II of the Seventh Schedule, dealing with subjects regarding states jurisdiction it has the following as Entry 17- "Water, that is to say, water supplies, irrigation and canals, drainage and embankments, water storage and water power subject to the provisions of Entry 56 of List I of Seventh Schedule (Union list), provides that "Regulation and development of inter- state rivers and river valleys to the extent to which such regulation and development under the control of the Union, is declared by Parliament by law to be expedient in the public interest".
The recent 1992 amendments to the Constitution regarding Panchayats and Municipalities introduced the following entries in the schedules listing the subject-areas in which the State Governments and legislatures may devolve functions to such bodies, so as to make them evolve as local self governing institutions. In the Eighth Schedule (Part IX) dealing with Panchayats, the subjects, ''Minor irrigation, Water management and Watershed development", "drinking water" and "maintenance of community assets" are listed. In the Twelfth Schedule (Part IX A) dealing with municipalities, the subjects "water supply of domestic, industrial and commercial purposes" is listed. Functional responsibilities are, thus, visualized for local Governments in respect of several aspects of water use.
Water being a state subject, the State Governments has primary responsibility for use and control of this resource. The administrative control and responsibility for development of water rests with the various State Departments and Corporations. Major and medium irrigation is handled by the irrigation/water resources departments. Minor irrigation is looked partly by water resources departments, minor irrigation corporations, Zilla Parishads/Panchayats and by the other departments such as agriculture. Generally, urban water supply is the responsibility of public health departments and Panchayats take care of rural water supply. Government tube wells are constructed and managed by the irrigation/water resources department or by tube well corporations set up for the purpose. Hydro-power is the responsibility of the State Electricity Boards.
There are numerous schemes by the Central as well as State Government to increase irrigation potential. Management of water resources is one of the priorities both with State as well as GoI, given the mandate to achieve higher agriculture growth rate targeted in the 12th five year plan. Thus, for irrigation we must also look into the role of the state and local bodies, instead of focusing on individuals that utilize irrigation facilities. Creation of such facilities (like water – drinking or irrigation) that requires higher capital investments and funds for regular operation and maintenance should not rest with farmers/ community of any welfare state. One could very well imagine the price of produce when all operation costs and interests are loaded by the farmer. Who is going to pay for such business operation? Is farmer under compulsion?
Several projects have been designed following the principle of participatory approaches involving community. To name few – Uttarakhand Decentralized Watershed Development Project, Uttar Pradesh Water Sector Restructuring Project, Chhattisgarh Irrigation Development Project, Orissa Integrated Irrigated Agriculture and Water Management Investment Program all designed to form Water Users Association (WUA) for planning, operation and management of water systems. Many states like Madhya Pradesh, Chhattisgarh, Orissa, Maharashtra etc. have also empowered these WUA by endorsing the Act along with rules and regulations. Still, we need to make assessments if WUA are successfully able to generate sufficient funds for operating and managing the systems.
In my view, agency like NABARD along with other banks/financial institutions must work on complete package. It could support a farm household with a clear distinction on the areas where the government has the responsibility and areas where an individual need to be supported in synergy with the operations, to bring out visible results.
P. S. M. Rao, Rural Livelihoods and Microfinance Consultant, Hyderabad
Financing minor irrigation for small holder farmers generally doesn’t get support from the lending agencies due to several reasons.
Firstly the investment for the purpose is not found economically viable, as the farm size is very small. The average holding in India as per the official statistics (2001), was 1.32 hectares which could possibly have come down to a lower level now. As high as 63 per cent of the farm holdings are below 1 hectare and those holding between 1 to 2 hectares account for 18.9 per cent. This means that small farm holders (those with below 2 hectares) account for 81.9 per cent of the operational holdings. So, the cost of investment for a well and arranging a pump-set will be very high and unviable compared to the yield from the small piece of land.
Secondly, the investment credit for the purposes like land development and minor irrigation are provided only to those who own sufficient land and has collateral to offer, if the amount exceed certain minimum level. So, low or no land holding is a discouraging factor.
Thirdly, financing for tapping ground water, that is digging too many wells in close proximity would result in inadequate availability of water in each well and their eventual drying up. Failure of the wells which is known only after investing a considerable amount is another problem for the people with small means.
In the background, financing to groups like joint liability groups or self help groups could be the practical solution. This arrangement would also help the situations like cultivation on the leased lands as pointed out in the query, since SHG lending is not supposed to be collateral oriented nor project based.
In fact I have observed that the SHGs of farming communities avail credit for agriculture and allied activities. So, the schemes suitable to a given area and for minor irrigation should be worked out on the bass of specific challenges. Also the general facts of small holdings and tenant farming have to be kept in mind.
Shailja Kishore, Aga Khan Rural Support Programme ( India ), Ahmedabad
In majority of the states like Gujarat , Maharastra, Rajasthan, Madhya Pradesh, Government has plenty of schemes for individuals and community based minor irrigation facilities (farm ponds, wells, bori bands, small check dams etc). Moreover, for proper and judicious use of water many Government schemes for promoting micro-irrigation devices (like drip, sprinkler and bucket drips) are available.
I would like to emphasize that today big farmers are taking the benefit of these programmes/schemes but the poor and the marginalized farmers are left out. We need to have a pro-poor approach and try to reach out to the poorest from the lower sections of the society. Poor needs a different approach in terms of special focus, regular follow-up and proper training/exposure.
Support from the Government and other NGOs are being provided in the forms of loans/grants to the CBOs, provision of a revolving fund and Public Private Partnerships. Participatory Irrigation Management and Lift Irrigation schemes which are community managed schemes are extensively practiced by Development Support Centre (DSC), Aga Khan Rural Support Programme India (AKRSP, I) in Gujarat and Sadguru Water Foundation.
In AKRSP (I) programme villages ( Gujarat ) under the drought coping and salinity theme, the women members of the SHG took loan from the groups for installing bucket drip in the kitchen gardens. It has been able to provide them with a livelihood option in environmentally adverse conditions. In Kukaswada Village , Mangrol Taluka a SHG member - Savitaben Chinobhai Solanki took loan for constructing well and installing drip in her farm for banana plantation.
In practice, microfinance is of great help but requires commitment from the client and the organization with a pro-poor focus. This has to be kept in mind else the needy amongst the poor will be left out.
Ravinder Yadav, New Delhi
Mr. Garg's query is important. Water being key input for agriculture productivity, its efficient use is equally critical. However, microfinance modalities may not be suitable because of following reasons:
- The upper limit of microfinance is kept at rupees fifty thousand however the minimum investment required in minor irrigation is one lakh rupees
- For minor irrigation the debt service period is very long while micro finance can offer funds for short to medium term funding
- Minor irrigation does not require any self help, so delivering microfinance through SHG or JLG may not work
In difficult terrain like Uttarakhand, the community irrigation projects like lift irrigation as practiced in Maharashtra and Orissa may work. Maharashtra follows Pani Panchayat-organizational mode to develop, maintain and operate lift irrigation projects. Pani Panchayat is usually different from Gram Panchayat as the former is formed for lift irrigation purpose alone. Topography is such that the techno-economic feasibility works out only when a critical number of farmers become members, as the capital cost is exorbitant. Here financing modality is crucial. Some banks in Maharashtra had extended single loans to the Pani Panchayat on mortgage of whole chunk of the village land. Many such cases turned into Non Performing Assets (NPA) for the banks. The default by some members has lead to cascading effect on others and breaking down of the Panchayat. Even those members who have the repayment capacities could not redeem their land since it was mortgaged in a single loan account. Therefore, financial re-engineering on case to case basis would be required.
In Uttarakhand, water harvesting and storage would need a similar system for village/group of villages. NABARD may develop suitable and alternate models based on techno-economic feasibility studies. Pilots may be tried with few banks interested in this.
Jay Prakash Lall, Agricultural Finance Corporation Ltd., Mumbai
I had an opportunity to work in Uttarakhand from 2002 to 2007. In the process of providing technical support services to different development departments, we came across different minor irrigation schemes in the hills of Uttarakhand. These schemes were implemented under National Watershed Development Project in Rain fed Areas (NWDPRA), River Valley Project (RVP) and Flood Prone River (FPR) project. All these were centrally sponsored schemes focusing on macro management of agriculture. Under these schemes/programmes, minor irrigation structures like dugout ponds, water harvesting structures, roof water harvesting etc. were constructed.
Under RVP, FPR and Hariyali, minor irrigation structures were taken up as water conservation measures in line with their programme objectives of fostering community participation in planning, execution and post maintenance of the assets. Under NWDPRA, pump sets were also provided to the users groups to lift the water from natural streams for irrigating their crops.
Under Indira Mahila Samekit Vikas Yojna (IMSVY), a state sponsored scheme was implemented across different districts of the state with support from NGO partners in SHG mode. It has twin objectives-
- To address the drudgery of the hill women. In hilly region, women are working for 16 hours per day
- To empower the women individually, economically, socially and politically.
Besides other interventions, roof water harvesting was a key component of this scheme. Rain water collected from roof was either stored in surface tanks or underground tanks for different purposes including life saving irrigation.
User groups or SHGs formed under these schemes/programmes were working on participatory mode. They were doing thrift and saving. These groups were also provided with revolving funds (interest free financial assistance to the groups for a defined period) for income generating activities/improving agriculture production system under some of the schemes/programmes. Some of the group members had arranged plastic pipes from the revolving funds and from their own savings/financial resources mobilized through Swarnajayanti Gram Swarojgar Yojna and Rashtriya Mahila Kosh for conveying the irrigation water from sources to fields. As a result, there was crop diversification and area under off-season vegetable cultivation was improved resulting in improved socio-economic and livelihood conditions.
Ramakrishna Nallathiga, Centre for Good Governance, Hyderabad
Indeed, all the options suggested by Mr. Mendiretta are appropriate to Sub Saharan African conditions, where water for drinking and irrigation is scarce. Madhya Pradesh has started a similar programme with community participation and revolving funds were given for door to door drinking water supply and sanitation.
DFID funded Andhra Pradesh Rural Livelihoods Project (APRLP) has initiated interventions in watershed management and livelihood generation through small scale activities financed under the programme. The criterion for selecting implementing agencies is available at: http://www.rd.ap.gov.in/aprlp/Publications/Volume-5.pdf (PDF, Size: 1.72 MB) and for the programme description, please visit: http://www.rd.ap.gov.in/aprlp/aprlpactivities.html. Moreover, case studies from the programme can be read at: http://www.rd.ap.gov.in/aprlp/Publications/Hope_CaseStudies_BK.pdf (PDF, Size: 1.90 MB).
N. Jeyaseelan, Helping Hand Micro Finance and Services, Kancheepuram, Tamil Nadu
I would like to share some of my views from my experience.
- Existing Micro finance products offered by MFIs generally do not suit the needs of most of the minor irrigation development programs, as the loan size is not adequate and the repayment term is very short
- Some micro irrigation programs like drip irrigation/pump sets, which bring returns in the short term can be considered under micro finance. But, the repayment period should be modified to coincide with the farm household's cash flow and not as 12 months or 50 regular weeks. IFAD's microfinance program for small and marginal farmers in Bangladesh demonstrates the flexibility in offering various repayment options to farmers viz. bullet payment at the end of the harvest, variable principal plus interest every month or 50 percent of loan as regular periodic installments and 50 percent at the end of crop season from the harvest. In India also, we need to introduce some flexible options at least few pilots can be taken up
- NABARD has started focusing on activity based groups for which they are flexible in their approach. Minor irrigation programs can be included as one of the program component in such groups for promoting agriculture based group activities and a flexible loan product could be designed
- For addressing minor irrigation programmes through microfinance, instead of MFIs, bank can try more innovative approaches. Since MFI could face an asset liability mismatch, as MFI gets bank loan for 3 to 5 year time period whereas minor irrigation program has to be financed by the MFIs for a period of 3 to 10 years
- The present ceiling under micro-credit is fifty thousand per member for other purposes and for housing it is Rs. 1.25 lakhs. The ceiling from fifty thousand could be raised to one lakh per member for micro irrigation program under microfinance
Puran Singh Yadav, Haryana Institute of Rural Development, Karnal
India has excellent examples of community based water management systems throughout the country. One of the good examples of community based watershed management is Ralegan Siddhi in Tehsil Parner, Ahmednagar ( Maharashtra ). It was developed by Annashaeb Hazare. Similarly, Hiware Bazar of Popat Pawar in the same district is another such example. Jhabua district provides an excellent opportunity to see the community based water management systems and the same can be accessed through DRDA Jhabua. Sukhomajari, Bunga and other places in the foothills of Shivaliks also has examples of community based water management systems.
Similar examples of community based water management and irrigations systems can be seen in Alwar and other adjoining districts of Rajasthan. Mr. Rajendra Singh of Tarun Bharat Sangh has done a wonderful job in the water scarce areas of Rajasthan.
Microfinance facilities through SHGs can prove to be highly successful for sustainability of such community based systems.
Sanjeev Kumar, The Goat Trust, Lucknow *
There has been quite interesting discussion on this issue and got lots of enrichment on the issue. However, I personally while initiating career in development, came to minor irrigation issue by default. We were implementing watershed concept based traditional rainwater harvesting structures revival project in Rajasthan in PRADAN (Professional Assistance for Development Action).
In fact the basic issue after water conservation in front of team was water utilisation by the target communities. As per concern of team, we had dealt with issue that how finance can be made available to the small and marginal farmer to utilise ground water for irrigation.
As many of you had been aware, PRADAN (www.pradan.org) has been innovative in promoting men/women lift irrigation committees and promoted this intervention on scale in Jharkhand. What I could learn from Jharkhand experience in PRADAN is water being a scarce resource and crop requiring it almost on similar time, a proper crop planning of water allotment is pre requisite while forming any group around water. PRADAN has documented its experience of promoting lift irrigation and has mobilized finance from DRDA, banks and SHG saving.
Importantly any such minor irrigation finance should look into total cost of water, seed, fertilizer and other input for improved agriculture. It would be real problem if we finance minor irrigation and look into adoption of productive and improved agriculture to be taken care by farmer themselves. Experience suggests that a whole package of intervention and finance for same is a must.
Interestingly this experience also suggests that building achievement motivation and/or livelihood plan of the family is equally important. So, issue does not rest with minor irrigation alone, it stretches towards overall agricultural productivity enhancement especially in remote area and with tribal people.
We had designed a similar effort to provide credit for minor irrigation while providing external facilitation on behalf "The Livelihood School" with BASIX Jabalpur unit while reviving fishermen cooperatives, wherein we find minor irrigation can boost livelihood of the dam displaced community. We found the economics very favorable as many of them has been purchasing water lifting devices through mobilizing credit from traditional financial sources at 2 percent monthly interest rate and still able to repay it.
We do tried such a project with a small cluster of SHGs while in Dausa in Rajasthan, but bankers attitude to finance such a sum to SHG came to real trouble.
Bhupal Neog, Livelihoods Improvement Finance Company of Meghalaya (LIFCOM), Meghalaya
In the context of mountain economy, water security is a key issue for livelihood security. I have seen that interior villages which have access to water are hygienic and have better life style than villages which have water scarcity. In the context of North East, this is very much true to the Cherrapunji area where in spite of heavy rainfall people have water problems due to poor water harvesting measures. Food security in these villages is also an issue. People are not able to grow enough food crops hence have to depend on market as well as on tuberous crops for survival. In those areas where food crops are grown now people have shifted to commercial broom grass cultivation as it is more remunerative and less water intensive. However, it has made the people of the area more vulnerable to market fluctuations as broom grass value chain is controlled by people outside the state from Gujarat and Rajasthan. The market fluctuations ultimately have a severe impact on their food security. On the other hand, there is ample scope in the area to promote roof water harvesting in Meghalaya. This can be an enterprise by itself in mountain areas and MFI need to design loan products to tap rain water harvesting structure, promote water security, promote food and nutritional security and promote healthy lifestyle. Livelihoods Improvement Finance Company of Meghalaya (LIFCOM) which has been working in this area is exploring this opportunity.
On the other hand, the Apatani tribes of Zero in lower Subansiri district of Arunachal Pradesh practice paddy cum fish culture. This is a highly evolved indigenous farming system, the energy and economic efficiency of which is very high, partly due to effective irrigation practices. The Apatanis with a highly developed valley cultivation of rice perfected over centuries and has often been suggested to be one of the relatively advanced tribal societies in the North Eastern. The Apatanis market more than 40 percent of their rice production to neighbouring Nishis and hill Miris. The concept of paddy cum fish culture has potential to be replicated across mountain areas. In the NERCORMP - IFAD project this concept was well explored in certain villages. MFIs that want to work in mountain areas need to explore such Traditional Ecological Knowledge (TEK) in collaboration with the communities and research institutions and develop loan products backed by business development services.
I would like to share one unique community effort to conserve fish at Rombagre in the Simsang river in West Garo hills under NERCORMP - IFAD project. This effort has increased fish population. Today the area has become a tourism spot. Hovering around the spot other nonfarm activities have come up. Can we think beyond micro-irrigation? May be investment in water-conservation-livelihood promotion? Can the MFI adopt such approach? Is it lucrative? MFI need to think about both social and economic rate of return.
The opportunity to invest in soil and water conservation structures has increased in recent times with the implementation of National Rural Employment Guarantee Scheme (NREGS). This opportunity needs to be explored fully, backed by MFI loan products and business development services (BDS). MFIs need to explore how to converge and channelize energy and resources to promote /revitalize micro irrigation, water security and livelihood security. Moreover, the zero energy pumps need to be promoted as this is not only earth friendly but also affordable. Carbon trading as an opportunity could be explored. International Development Enterprises (IDE) have successfully marketed low cost irrigation products like treadle pump (in plain belt) and bucket drip and micro irrigation products (in mountain areas) backed by business development services in India.
There is need to do more research on pressure based technologies. The demonstration sites of International Centre for Integrated Mountain Development (ICIMOD), Kathmandu (www.icimod.org) have displayed several models for micro irrigations in mountain areas. Moreover, another agency called ‘Practical Action’ (www.practicalaction.org) also work in areas of Nepal , Peru and Sri-Lanka on providing sustainable technologies for irrigation and rain water harvesting. The concept of rain-water harvesting needs to be encouraged in the mountain areas. Agencies like The Energy Research Institute (TERI) are already working on affordable rain water harvesting technologies. In the North Eastern Region of India context, I feel there is a need to explore the traditional irrigation systems/mechanism. For example, the bamboo technology based irrigation system in the mountain areas. MFIs in north eastern region need to explore such opportunities also as a part of financial inclusion process.
As far as Uttarakhand is concerned the potentials of micro - hydel and water mills need to be fully harnessed. The rich water resources in the Yamuna valley need to be explored for sustainable water harvesting crop and vegetable production. I feel that there is a need to study the impact of climate change on sustainable water harvesting and crop production. The pressure to grow more off season vegetables in the valley due to high market demands is likely to have a very adverse impact on the water resources. The communities need to be provided necessary handholding services to preserve water resources and at the same time prepare to adapt to challenging issues like climate change-water security-sustainable food production and food security.
There is a need to grow more trees in the region so that water catchment areas are protected. The best examples of water conservation can be found in Tehri itself. SBMA has done a very good social forestry work at Devprayag. I feel, to have more water in hills simply promote more trees, conserve water resources and channelize it to the fields. Can MFI think about financing trees of economic importance in hill areas on a cluster basis?
P. Uday Shankar, Microfinance Consultant and Trainer, Coimbatore
The responses to the queries raised by Mr Subhash Chandra are interesting. Personally I had the privilege of introducing sprinkler irrigation in Wynaad district way back in 1984 exclusively for small coffee growers. It was a path breaking area development scheme covering the entire district through finance from Syndicate Bank and refinance from NABARD. This type of time bound, target oriented, area development schemes with a fixed outlay were working out miracles in villages in those days. I wonder if such schemes are still taken up by banks and NABARD.
As far as community based irrigation schemes are concerned, one of the best examples I have witnessed is the work done by AKRSP in Surendarnagar district and the case studies are available in plenty and even with Solution Exchange.
Coming straight to the first query raised by Subhash, I would like to narrate my experience of financing pump sets for irrigation. While working in the bank I used the NABARD refinance to the hilt and in places where I was posted if there were no schemes for pump set finance, my first job was to prepare one for the bank. After moving on to microfinance in 1998 I still found a scope for financing pump sets. For sometime, I was exploring the idea of micro-leasing but it did not work out.
Before working out any financing models for pump sets, under microfinance, we have to understand the way these equipments are sold in the market. Cash purchases by farmers form only a small percentage of the purchases. Some farmers having a long time dealing with banks would be lucky enough to get a loan. In at least 30-40 percentage of the cases where small farmers come in for purchases they may not have a bank loan and still would be enquiring. In such cases the dealer himself would offer to arrange a loan for the farmer mentioning the fact that it would come at a higher rate of interest. In all probability the dealer would be shelling out the amount from his own kitty and pocketing the interest on a periodic basis apart from the regular commission he gets from sale of the pump set. Not all the dealers would be able to bring in their own money to lend to the farmer for purchase of a pump set. In my experience, there are a good number of dealers who are not able to do business with this 30-40 percent segment, as the farmers do not have enough to purchase a pump set. MFIs working in areas where there is a good scope for financing pump sets can try out the following model to finance small farmers purchasing pump sets.
The MFI could enter into a tie-up with any of the leading pump set manufacturers and their dealers in that area. The MFI could use the dealers point for sourcing its customers. Till this point it would look like any other bank - manufacturer tie-ups. The difference the MFI could make here is to bring in the dealer in the loop and use him to get the repayments. The dealer who would have been otherwise deprived of a segment of business of the 30-40 percent would only be too pleased to cooperate with the manufacturer and the MFI to not only source good customers for the MFI but also assist in the repayment of loans. The dealer being a local person of some standing in the locality would be able to get information on harvest and movement of crops to enable prompt repayment. The dealer’s word would have a value when it comes to collecting dues from the farmers and they could be given a small incentive for their efforts in collection. The loan for purchase of pump set and necessary accessories could be extended as a medium term loan by the MFI (3 to 5 years) and the installments could be worked out on half yearly/annual installments as per the cropping pattern in the operational area. The equipment would be under hypothecation to the MFI and in the event of litigation the equipment could be taken over through a court order.
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