Drip Pool Programme: Innovative Community-Managed Finance Mechanism
C&A Foundation’s Drip Pool Programme highlights the importance of agro ecological initiatives and industry-wide collaboration in improving the livelihoods of smallholder and marginal Indian farmers while addressing environmental challenges.
Almost half of India’s population depends on farming and agriculture for their livelihood, with smallholder and marginal farmers making up more than 85 per cent of total farming households. And yet, agriculture in India faces several challenges; from water scarcity and the growing risk of climate change to poor soil fertility and farmer poverty.
To help combat these challenges, the national government in Indian and various state governments are taking measures to promote farming through initiatives that will help farmers to grow and develop.
One such initiative is the Gujarat Green Revolution Corporation (GGRC), a Special Purpose Vehicle (SPV) formed by the Government of Gujarat, providing subsidies of about 70 per cent to farmers to install drip irrigation. But while the subsidy certainly helps, the cost is still out of reach for many smallholder and marginal farmers who can’t afford to pay for the remaining 30 per cent.
C&A Foundation is helping to supplement the remaining costs for farmers in the water-stressed region of Gujarat through the introduction of an innovative community managed financing mechanism called the Drip Pool Programme.
Created in partnership with the Aga Khan Foundation (AKF) Aga Khan Rural Support Programme (India) ((AKRSP-(I)), the programme provides interest-free loans to smallholder and marginal cotton farmers so that they can afford to buy and install drip irrigation units.
Farmers are provided with interest-free loans for a period of two years and repayment schedules are personalised to suit their individual circumstances taking into account things like cash flow, repayment capacity and alternative sources of income. The money is then repaid back into the community finanacing mechanism which is used to give further loans to farmers.
The community financing mechanism is managed by Farmer Producer Companies (FPCs) with support from AKRSP(I). By promoting local ownership of the fund through activities such as agronomic training, the programme works to ensure the fund’s long-running operation after the exit of C&A Foundation.
The Drip Pool Programme has resulted in higher earnings and an increased quality of life for thousands of participating cotton farmers. The affordability of drip irrigation for small landholders has resulted in a 31 per cent higher net income from cotton cultivation compared to non-drip farmers. Farmers just like Mathurbhai Jivrajbhai, previously dependent on rain-fed cotton to make a living, who since joining the programme has increased his gross earning by EUR 277.
The programme provides far more benefits beyond just an increase in income, with farmers seeing environmental and agronomic impacts thanks to drip irrigation. Programme farmers have reported using just 1,191 litres of water per kilogram of cotton, compared to the 5,923 litres consumed by non-programme farmers. They have also reported benefits such as uniformity in production, better yield of seed cotton and increased fertiliser cost efficiency as well as reduced weeding and lower labour costs.
To keep up with soaring agricultural challenges facing India, a different approach to farming is necessary. The need for increased public and private investment and the introduction of policies and initiatives that encourage agro-ecological principle is clear.
The Drip Pool Programme shows that multi-stakeholder partnerships and agro-ecological innovation can help create a sustainable production system which promotes not only the health of soils and ecosystems, but also people.
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