Farmer-led irrigation focuses on small-scale, local, and contextual irrigation solutions to improve livelihoods and food security. Subsidies, pay-as-you-go schemes, and grants are often used by farmers to purchase irrigation equipment in sub-Saharan Africa. However, it may not always make sense for smallholders to own irrigation equipment. The Daugherty Water for Food Global Institute’s research challenges the assumption that ownership provides the maximum utility to smallholders. The research explores businesses that provide irrigation as a service, in which farmers in Rwanda lend and rent small pumps in informal markets, with the goal of finding scalable, farmer-led solutions to increase irrigated agriculture.
Farmer-led irrigation focuses on small-scale, local, and contextual irrigation solutions to improve livelihoods and food security, and often involves the private sector. Farmer-led irrigation is not a new concept in the global development community, but one in which there are varying ideas on implementation. Well-intentioned policies to support farmer-led irrigation development may fall short by neglecting to understand the needs of farmers and the support systems that must be in place to create long-term viability.
Government and donor-funded subsidies, pay-as-you-go schemes, and grants are often used to make the purchase of irrigation equipment more feasible for farmers in sub-Saharan Africa. The assumption behind these policies is that the most desirable outcome for farmers is to own their own pumps. However, it may not always make sense for smallholder farmers to own their own irrigation equipment – often, these are expensive and depreciating assets which are not used often and require ongoing maintenance and storage.
Instead, farmers may opt to hire local entrepreneurs in an informal market to provide irrigation services for their farms. New research from the Daugherty Water for Food Global Institute (DWFI) at the University of Nebraska unearths how irrigation-as-a-service can provide value to both farmers and service providers, while unlocking new business opportunities for entrepreneurs.
Irrigation-as-a-service is practiced through informal markets, including friendly transactions in which neighboring farmers lend and rent irrigation equipment among one another. Because these transactions are not tracked, the impact of lending and renting small-scale irrigation equipment is often unrecognized.
Conducting local field interviews and examining the informal markets that already exist organically can challenge assumptions on how best to provide irrigation access to local farmers. In a report published in February 2023, DWFI explored the current state of irrigation-as-a-service for smallholder farmers in Rwanda with the goal of finding scalable, farmer-led solutions to increase irrigated agriculture. The business models the team examined include farmer-to-farmer lending, entrepreneur-to-farmer rentals, and water tanker trucks.
Mary, for example, a farmer in Rwanda, rents irrigation equipment from Claire, her neighbor who owns a pump but doesn’t irrigate every day. Mary pays Claire a set fee three times a week, buys her own fuel, and is in charge of any repairs that come up when she is using the pump. The arrangement results in benefits for both parties. Claire can quickly pay off her pump, receive rental income, and invest in more equipment if desired. By irrigating, Mary can farm during additional seasons and grow high-value crops — all of which result in increased income. Additionally, this irrigation-as-a-service arrangement can bypass barriers to accessing credit, reduce farm labor, and build technical capacity for smallholder farmers.
“Even though I could purchase my own pumps,” said another farmer who hires a local entrepreneur to irrigate his crops, “I prefer to hire someone to irrigate for me.”
Estimating how much land is being irrigated using pump rentals, as in the case of Mary and Claire, is difficult due to the informal and inconsistent nature of the market. However, DWFI estimates, using a proven methodology, that lending and renting of pumps has increased the actual irrigated area by 8-35 percent in Bugesera district and 3-21 percent in Nyagatare district of Rwanda.
The Government of Rwanda’s support for small-scale irrigation is currently focused on the sale of subsidized irrigation equipment through fewer than two dozen approved retailers. To support scaling up informal markets, DWFI recommends that Rwanda diversify its funding for smallholder irrigation to support more irrigation-as-a-service entrepreneurs with startup grants, adjust policies to promote new businesses, and encourage farmers to lend their equipment.