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Institutions supporting small-scale irrigation

The lack of effectiveness of the national system of agricultural institutions in terms of support to smallholder irrigation is a major issue. There is prima facie evidence that key agricultural institutions of research, extension, rural finance and marketing are not functioning as an integrated system in most countries in the region. These institutions have not forged a common vision or agenda to assist smallholder irrigators. Public servants, in general, and their careers in particular, are unaffected by how smallholder farmers view their performance. This sad state of affairs is worsened by the top-down center-periphery, linear and sequential view of scientific and institutional processes that obscure the participation of smallholders (Antholt, 1994).

Rural finance

Problems of transaction costs and collateral feature prominently in explaining the failure of smallholder credit schemes in Africa (Mabeza-Chimedza, unpublished). According to Mabeza-Chimedza, the failure of public schemes, in spite of concessional interest rates resulted from the limited lending experience of these organizations, the high transaction costs, and the lack of collateral by target farmers.

TABLE 4 Farmer organizational participation at sample irrigation schemes 1990/91 (percent)

Scheme

Marketing cooperative

Savings clubs

Labour group

Community

24

12

34

Bangure

15

10

55

Chakandura

45

30

55

Mkoba

30

13

39

Mutambara

16

6

19





Agritex

12

4

12

Mabodza

30

13

22

Mondi Malaga

15

15

15

Mwerahari/Sachipiri

21

26

5

Senkwazi

25

10

30

Chakohwa

14

0

0

Chibuwe

6

3

3

Tawona

9

0

24





ARDA

8

0

0

Middle Sabi

27

0

0

Chisumbanje

0

0

13





Barn

22

5

17

Maboleni

21

11

26

Dufuya

21

4

14

Mbiru

19

6

19

Mushimbo

33

0

25





Dryland

29

31

30

Charandura

55

40

60

Chakohwa

0

22

0

Source: UZ/IFPRI/Agritex Survey Data, 1 990/91.

These are all problems faced by smallholder irrigators as well. Most recent efforts with micro-finance are aimed at reducing transaction costs. These efforts are also floundering because of the focus on the supply side of finance while neglecting the demand side. By neglecting the demand side, Mabeza-Chimedza concludes, solutions to the problem of high transaction costs have only managed to shift costs from supply to the demand side without actually reducing them.

Zimbabwe's experience with the National Farm Irrigation Fund (NFIF) is a typical example of the failure of public sector credit schemes targeted at small-scale irrigators. The NFIF was established in 1985 with a start-up capital of Z$18 million for a revolving fund available to both small and large scale irrigators. To date, however, most of these funds have been utilized by large farmers whilst a negligible amount has been invested in expanding small-scale irrigation.

The first complication with the NFIF was the requirement that funds be utilized for infield works only for smallholders. But because communal or traditional land is de jure state land, this means that farmers cannot borrow these funds against the land that is to be developed. The state (land owner) would have to finance this operation. In addition, these farmers do not have water rights since these rights also belong to the state. In contrast, large farmers with titled land can acquire water rights in their own right.

TABLE 5 Working capital on sample irrigation system 1990-91

Source: UZ/IFPRI/Agritex Survey Data, 1990/915

TABLE 6 Cost per hectare of irrigation development in selected SADC countries, 1985


Botswana US$/ha

Zambia US$/ha

Zimbabwe US$/ha

All projects analysed

5 886

2 032

9 460

Projects with: IRR 20% or larger

916

1 840

3 957

IRR 10-20%

4 869

2 640

9 908

IRR below 10%

11 964

8 808

9 483

Area analysed (10 ha)

35

13

63

Percent of potential

60

3

14

Note: IRR = Internal Rate of Return Exchange Rates per US$ are Pu2; Zk 11 and Z$1.59. Source: Olivares (1987)

TABLE 7 Comparison of basic data on irrigation projects from a few selected countries south of the Sahara

COUNTRY
Name of Project and Closing Date

Coat of Irrigation Works (US$M)

Bank/IDA Lending (US$M)

Total Project Cost (US$M)

Implement Expected (in years)

Period Actual (in years)

ERR Expected (%)

ERR Expected (%)

BURKINA FASO

6.04

9.4

18.5

7

7

16

1

Second Rural Development








CAMEROON








Semry Rice I (6/76)

3.55

3.7

9.3

4

4

13

23

Semry Rice II (9/84)

21.6

29.0

55.5

6

8

15

20

KENYA








Bura Irrigation (6/86)

16.0

40.0

105.0

6

8

13

-

MADAGASCAR








Lake Alaotra Irrigation

5.18

5.2

8.96

5.5

4.5

11

22 1/

(6/75) Morondava







2/

Irrigation (12/86)









n.a.

14.1

56.6

5

8.5

16

3/

MALI








Mopti Rice I (11/78)

5.62

9.5

13.1

6

6.4

14

17

Mopti Rice II (6/2)

16.2

14.8

31.5

5

7

18

3

MAURITANIA








Gorgol - Noir Irrigation (3/82)

45.2

15.0

24.5

4

4.6

12.5

3

NIGER








Irrigation I (6/84)

18.4

15.0

24.5

4

4.6

12.5

3

NIGERIA








Agriculture Rice Deve 1

24.3

16.3

46.6

5

6

17.6

*

Bida Agriculture








Deve.(6/86)

8.2

23.0

64.4

6

7

16

19.3

SENEGAL








Debi-Lampsar Irrigation (3/86)

22.62

20.0

36.7

5

8

10

-4

SOMALIA








NW Agriculture (6/86)

8.69

10.5

14.9

6.5

7.5

11

-2

SUDAN








Rahad Irrigation (12/82)

164.6

15.6

395.6

6

7.5

15

20

Negative 1/19772/1981 3/negative to zero

Research and extension

It appears that problems with research and extension systems are likely to a be 'long haul' rather than a 'quick fix'. The vision and commitment for that change has to come from within each African nation. It could be argued that the stage is set for this change to happen given the impressive growth in numbers of well qualified scientists in agriculture R&D organizations, but it would appear that public sector research organizations are largely out of synch with their most important client, the smallholder farmer. Research and extension services are poorly linked, and these institutions are facing severe budgetary cuts.

TABLE 8 Estimated ERR of some irrigation projects in sub-Saharan Africa

COUNTRY IRRIGATION PROJECTOR (%)

Madagascar

Lake Alaotra

Negative

Sudan

Rahad

20.0

Mauritania

Gorgol Noir

2.7

Kenya

Burra (settlement)

-13.0

Niger

Niger

3.0

Burkina Faso

Nina Dionkele (rice)

-5.3

Cameroon

Secondary Semry (rice)

16.0

Senegal

Polders

-

Sudan

Rosires

14.0

The ideological shift from public agricultural organizations to entrepreneurial agencies able to exploit economic and political opportunities for their clients is most urgent. Institutional innovation, however, has not been handled as a social and researchable issue. Social scientists have tended to concentrate on "safe" issues such as marketing, farming systems research and participatory rural appraisals whilst avoiding the major issues. Social scientists also tend to avoid controversial issues, yet it tends to be the controversial issues that have a higher pay-off in terms of change (Busch and Lacy, 1983).

Some institutional problems experienced by African countries can be traced back to inherited colonial institutions (Dumont, 1996). Southern African countries have inherited mainly British colonial institutions, administrative structures and education systems. Dumont argues that even in the face of retarded national development and ineffective institutions, bureaucrats will proceed on this pathway as long as they can hang on to some privileged status.

With particular reference to irrigation, Africa has invested minimally in research and extension or low-cost irrigation equipment, yet these areas should achieve great returns if successful. Poor links with the private sector also means that not much is happening in developing prototypes for manufacture, or importation of units for tests and possible mass production.

Marketing and trade

The marketing and trade of irrigated high-value crops offers the greatest opportunity for intensifying small-scale irrigation in East and Southern Africa. The Uruguay Round, leading to the World Trade Organization and the agreement on agriculture now suggest that food and agricultural markets are increasingly being deregulated and freed from state intervention. Africa now has to recapture its diminishing share of the world agricultural markets. Table 9 shows the clear trend in this loss of markets for high value crops.

This section draws heavily from several articles contained in the volume edited by Jaffee and Morton (1995), on Marketing of Africa's High Value Foods. Table 10 shows that among high value foods, Africa exports are largest for fresh fruit and vegetables (especially citrus fruit, pineapples and bananas), which are all suited to small-scale irrigation. Gaffee (1995) summarizes in Table 11 the economic properties of major marketing infrastructure and the functions necessary for successful marketing of high value commodities.

Most private traders and processors in Africa face considerable infra-structural constraints, endure substantial risks, and incur considerable costs because of inadequate and dilapidated transport and communications infrastructure (Jaffee and Morton, 1995). Table 12 shows how Africa lags behind its Asian counterparts with respect to physical infrastructure. African countries have far lower rail and road densities, fewer motorized vehicles, poorer access to telephone and postal services, less rural electrification and fewer international air freight traffic. All these factors hinder greater intensification of smallholder irrigation and marketing of high value and/or perishable commodities.

Fresh fruit, vegetables and cut flowers still offer one major growth area for the future in East and Southern Africa. Table 13 shows that between 1976 and 1989, Sub-Saharan Africa's horticultural exports grew from US$ 636 million to more than US$15 billion. This appears to be a major growth area for the future. Table 14 also shows a weighted increase in Africa's world market share of horticultural products between 1973 and 1989. This increase was largely due to relative increments in the market share for fresh fruit and nuts, as well as cut flowers.

TABLE 9 World market shares of sub-Saharan Africa for major agricultural commodities (% of world export value)

Commodity

1969-71

1989-91

Coffee

27.3

17.8

Cocoa

77.9

67.1

Sugar

16.0

13.9

Tobacco

8.6

8.6

Tea

7.7

13.5

Combined

15.5

15.3


20,8

16.3

Source: Data from FAO Trade Yearbook, various issues

TABLE 10 African exports of high value food products (1988)

Product group

Export value ($ Million)

% of HVF exports

Fruit/Vegetables

1217.0

41.6

Fresh

930.6


Processed

286.6


Fish Products

957.0

32.7

Shell Fish

481.2


Other

475.8


Livestock

313.2

10.7

Live Animals

163.7


Meat

138.0


Diary

11.5


Oilseed/Oils

270.3

9.2

Oilseeds

112.3


Oils

158.0


Nuts/Spices

165.0

5.6

Nuts

58.6


Spices

106.4


Totals

2922.5

100.0

Items:


 

Total African Food Exports

8160.6


Coffee Exports

2436.3


Cocoa Exports

1883.5


Source: TARS Data Base (World Bank)


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