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India
Madhya Pradesh
Overview Background Solutions Documents
Rainwater Harvesting
Encouraging smallholders to build their own tanks to conserve monsoon rainwater for irrigation has reaped widespread benefits in parts of Madhya Pradesh.  
Surface water sources are used on less than 20% of the net irrigated area of the state but groundwater is not available in some areas and is declining in others because of over abstraction and insufficient recharge.

Rainwater harvesting has been initiated by various organizations in many places in India. The project’s study focused on Dewas District where an initiative started in 2006 has become a beacon for other farmers.
 
Benefits of Rainwater Harvesting
More than 5000 tanks have been constructed in Dewas District. The payback period is just 3 years and the cost-benefit ratio is 1.5-1.9.
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Water use

Rainwater is stored for 6-7 months to be used mainly in Rabi (dry) season. The water can also be used for supplemental irrigation during Kharif (monsoon) season.

Cultivation patterns

The proportion of area cultivated during Rabi has increased from about 23% to 95% (see chart).
 

Livestock

The proportion of area cultivated during Rabi has increased from about 23% to 95% (see chart).

Fish cultivation

Is possible (but not done for religious reasons in the study locations).
 
 

Irrigation costs

Have gone down because less pumping is required.

Groundwater

Anecdotal evidence suggests that groundwater tables are rising.
 

Conflicts

Structures on private land mean that problems of water sharing do not exist.

Income potential

Farmers could earn over US$ 600 extra each year.
Increasing Rainwater Harvesting
Financial Solutions
  Provide access to loan capital - Treating rainwater harvesting structures as part of the agricultural loan portfolio would allow a wider spectrum of farmers to finance the structures.
  Microcredit, cooperative banks and/or the donor community may also become involved through loan guarantees or revolving lines of credit.
  Offer an appropriate subsidy to partially compensate farmers for the high cost of building water harvesting structures.
  Financing could be provided under the Mahatma Gandhi National Rural Employment Generation Scheme (MGNREGS) or other relevant programs. Civil society and panchayats should be informed about how to obtain this support.
 
Technical and Information Solutions
  Identify suitable areas for rainwater harvesting e.g. with biophysical conditions similar to Dewas District.
  Show farmers the benefits of building their own tanks and give them the relevant information.
  Garner the support of the district administration. A responsive, understanding, and supportive local level bureaucracy is absolutely essential.
  Provide technical support such as engineering expertise and construction advice.
  Provide extension support to increase outputs e.g. advice on which crops to grow, water requirements, fisheries and livestock.
Maximizing the benefits of MGNREGS
The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) to address chronic rural poverty has been effective in developing water harvesting and storage structures. However, not all farmers in the scheme can access this water because they do not have pumps.

MGNREGS guarantees employment to rural households on construction work that addresses the causes of chronic poverty and supports sustainable development of the agricultural economy.

It covers rural areas across the country and the majority of projects are water security related infrastructure. On average US$6 billion is spent on water projects each year. In Madhya Pradesh the focus has been provision of on-farm irrigation facilities, such as ponds and wells.

Despite these laudable efforts some farmers are still unable to use the water because they can not afford the equipment to get it to their crops.
To maximize MGNREGS contribution to water security and agricultural output it is necessary to know whether the works are appropriate, effective, of good quality and durable.

The project carried out a study in four areas of Madhya Pradesh to assess the benefits of MGNREGS and found that:

  Over 5 years the irrigated area has risen from 13% to 52% in the kharif (wet) season and from 4% to 22% in the rabi (dry) season.
  Cropping intensity has increased 27%.
  Farmers’ incomes from crop production have increased by 36-47%, from INR 400 to INR 800 per acre.
  Around 57% of the farmers also use the water for domestic purposes and livestock.
  Farm bunding has improved moisture retention, and increased crop yield in kharif season but has had no effect on rabi season.
However, 44% of farmers were not able to make use of the water because they needed pumps.
Solutions to maximize the benefits of MGNREGS
  Provide soft loans with long repayment periods, open to all, including farmers with existing debt.
  Offer concessionary (agricultural) rates for pump equipment.
  Consider providing pu,ps free of charge (This requires convergence or collaboration between MGNREGS and other schemes).
  Improve knowledge and understanding of MGNREGS amongst civil society and panchayats.
  Discuss proposed works with beneficiary farmers to ensure appropriate construction.
The Benefits of Drip Irrigation

Drip irrigation saves water, increases yields, reduces the cost of pumping, and requires less labor.

But current programs to subsidize the cost of drip systems may hinder its spread. Alternative financing schemes could increase adoption rates and save the State considerable expense.

Drip irrigation methods range from simple bucket kit systems for small farms to automated systems linking release of water to soil moisture conditions. They save water by allowing it to drip slowly to the plant roots. They have been shown to achieve up to 95% water use efficiency, enable fallow land to be cultivated and higher value horticulture crops to be grown. Drip can also help reduce salinity and waterlogging, and higher yields have been reported.

Of the 69 million ha (M ha) of irrigated land in India only 0.5 M ha has been brought under drip irrigation but the government is targeting some 17 M ha under micro-irrigation including drip.<

The Research
The reasons for the slow uptake of drip irrigation were investigated, with particular emphasis on the role of subsidies.
Farmers reported the following constraints:
  Technology: Lack of awareness and the difficulties associated with the use of the technology.
  Crop/Farm Size: Land holdings are small and drip systems are often designed for large areas.
  Cost/Subsidy/Finance: Difficult to obtain government subsidies or other forms of financing without which the initial investment costs are too high.
  Water Related (Quantity/Quality/Pricing): Even though drip systems are water efficient an adequate water source is still required and is not always available; some farmers have enough water and have no need to conserve it; there are subsidies for surface water and free electricity for pumping.
  Market supply: In some areas drip systems are not available.
  Power supply: In some areas there is insufficient power or the supply is unreliable.

In almost all areas the high initial cost of the system has been a critical constraining factor. To address this, the Government of Madhya Pradesh offers a generous subsidy and estimates suggest that more than 95% of drip sales in the state are through subsidies.

The current subsidy system
  Total subsidy – 70 to 80% of the drip system.
  Farmers pay the unsubsidized portion of the equipment cost (usually as an upfront payment with no financial support).
  The approval process is complicated and middlemen charge the farmers.
  Many farmers wait for a subsidy rather than invest their own money.
  Farmers have to purchase a kit rather than individual components – there is no choice. This stifles technology innovation.
The proposed system
  The government gives interest free loans, repayable after five years, for 100% of a drip system.
  Loans administered through existing financial institutions in rural areas.
  The farmer is free to buy a drip system from any dealer or manufacturer, choose any desired configuration, and negotiate a price and after-sales service conditions.
  The farmer does not need to visit government offices to complete formalities.
  The government plays a facilitative role, ensuring farmers are treated fairly by manufacturers or retailers.

For the government: If the current subsidy regime were modified, the capital outlay to bring the same number of farmers and acreage under drip would be substantially reduced because competition would lead to a reduction in market price and government would effectively only pay the interest forgone on their investment.

For the farmer: the proposed loan scheme would cover the entire cost of the drip system, so there is no upfront cost for the farmer.