Background
In the arid area of Northeastern Brazil there is the single largest concentration of poor people in rural Latin America. Cyclical droughts gave birth to the so called “industry of hunger”, marked by federal support to distribution of food – nowadays as food stamps – and the payment of civil works to the
construction of water storage systems much to the benefit of wealthy landowners. Currently, poverty and cyclical droughts are still at the origin of much poverty and mal nutrition while the region became a net food exporter based on governmentally supported large irrigation projects in the surrounding
areas of the majestic San Francisco river.
Water for productive uses and food security is at the core of any program to overcome poverty in the region. This is the natural and most important complement to ongoing water storage programs originally conceived by a network of non-governmental organizations (www.asabrasil.org.br) and later supported by the Brazilian Federation of Banks. For that purpose, the Fiorello LaGuardia Foundation decided to study the feasibility of productive uses of water through drip irrigation by small landowners, in cooperation of different
local partners.
Small farmers’ associations and rural credit cooperatives were considered, leading to an agreement with APAEB (Associação de Desenvolvimento Sustentável e Solidário da Região Sisaleira - (www.apaeb.com.br) and the rural credit cooperative within the same region – COOPERE (about 12,000 associates). Nowadays APAEB runs the larger – if not the only – successful experience with the use of PVs at a community level in Brazil. About 550 off-grid households – in addition to a rural school – have PVs for many years now with no support from the local utility. Appropriate maintenance – the main reason for failure of most governmentally-supported PV programs – is facilitated by APAEB and corresponding demand aggregation when it comes to buy spare parts.
Productive Water – An Innovative Approach
The proposal was not restricted to testing another technology – as usual -, or to putting in place another pilot-project with external aid. Foreign and Brazilian governmental and non-governmental organizations have done so without much effectiveness due to lack of appropriate cost-benefit assessments and mechanisms of accessing micro-credit in order to assure replication (2) .
Indeed, not even within APAEB and COOPERE there was previous experience with cost financial analysis of similar pilot-projects, in spite of the fact that both support many such projects and often times receive significant grants from foreign NGOs. The number of pilot-projects is such that a mere site visit is enough to understand the need for appropriate cost-benefit assessment as cornerstone to dissemination. Indeed, it is unlikely to take place if farmers are not able to evaluate the potential of added income generation of such pilot-projects, in addition to understanding the new technique. However, it was indeed difficult to explain to local project managers and consultants that this was not just another donation, but a real partnership, with detailed financial assessment required to start discussions with BNB on the economic feasibility of similar projects. Agronomists at APAEB were not used to interacting with financial analysts, data gathering was time consuming, but end results indicate that there are real opportunities for replication.
PVs and the Efficient Use of Water
In an initial stage of this project, the use of PVs was considered almost as a rule of thumb to project development. This was due to the fact that there are millions of people – most in rural areas – without access to electricity services in the region, and opportunities for this technology are evident. Therefore,
taking into account that the project could only be successful if based on real needs of real people, the project was redesigned in order to work on cost-benefit assessment of drip irrigation under diverse scenarios, i.e. considering PVs as one among different potential sources of electricity (3).
Partnering – Getting to Know Each Other
Finding partners was a major issue, since the arid zones – which are the poorest, also – are far from main urban centers. It took some effort before establishing preliminary contact with the Small Farmers’ Association of Valente – APAEB (4). APAEB has a tradition of intensive social
activities and participation of associates in decision-making, consistent growth of the rural credit cooperative, capacity to absorb innovation, leadership among similar organizations in the region, tradition of providing at least some level of technical assistance to associates, availability of effective communications systems within the area.
Average annual rainfall is of the order of 750 mm. This level of rainfall would be sufficient to ensure a reasonable level of agricultural production if evenly distributed over the year, which is not the case. Thus, there is need to appropriate infrastructure for water storage, but direct governmental investment in such infrastructure has been historically absent or largely insufficient.
Initial negotiations with APAEB for developing a program oriented both to introducing efficient, productive uses of water and to appropriately measuring productivity gains were not an easy task. It required more personal acquaintance than originally expected. Above all, the idea of monitoring economic benefits from grants was totally new and it was necessary to make it very clear that this was not an indication of lack of confidence in the Association’s qualifications and integrity. Subsequently, it was necessary to find individual owners who were receptive to a new technology within the region, while having access to minimum requirements in terms of water availability and storage. Last but not least, coordination between small farmers, agronomists and the financial analyst became a major obstacle to project development – as it happens in most organizations, agronomists tend to focus on proving that it makes sense from a purely “technical” standpoint, while being reticent about keeping track of real costs and team working with a specialists who speaks a different “language”. It was also difficult to make sure that small farmers would be willing to provide consistent information on their new sources of income. All in all, project start up took more time than originally expected and final data is now relying on factors that follow a cyclical pattern which is not under project management control, such as rate of growth of chosen agricultural species.
Another important partner was Instituto Eco-Engenho - IEE (www.ecoengenho.org.br), a NGO with consistent experience in PV systems for off-grid communities. IEE and the LaGuardia Foundation cooperated in many innovative approaches to improve income generation in the poorest areas, and for the specific purpose of drip irrigation IEE has done an outstanding work with the choice of a family-owned small farmland at the border of the San Francisco river for a pilot-project with drip irrigation. The reason for the choice is easy to understand: the river crosses the arid Northeast, and farmers at its borders are subject to the same constraints related to cycles of rain, which forces them to use diesel power generators to pump water for irrigation – there are numberless off-grid communities along the river -, while having to bring diesel by boat from quite long distances. Maintenance of generators is also expensive and may threat the whole production when spare parts are not available in the nearest village. At the moment in which this article was written, the whole system was installed, IEE was providing technical assistance to farmers so they learnt to work with drip irrigation (having to pump much less water from the river) and to move towards more valuable products, but the comparative cost-benefit assessment was not completed. How did the final price of diesel and corresponding excessive water pumping can be compared with solar pumping and drip irrigation will be the final outcome of this project. In the mean time, representatives of numberless other communities in the vicinity have been visiting the project and expressing their interest in getting rid of the diesel powered generators, with all its complex logistic for ensuring maintenance and fuel supply.
Project Implementation
For dissemination purposes, the overall program was named “water in the right point” by APAEB. Different approaches were taken to deal with each small farmer. Farmer Ednal Moreira Carneiro is experienced with cheap and goat raising for the meat production, and faces animal feeding problems and costs. He owns about 20 hectares of land with sandy clay loam soil. He chose to plant amaranth, sorghum and brachiaria grass to feeding his herd of 60 animals that will soon be enclosed rather than let free to graze on species that are not as nutritious as the ones that will be available with irrigation. At this stage, his expectations are high on the results of irrigation, and these expectations came true once he realized the avoided costs of replacing animal feeding acquired in the market during droughts.
Farmer Jose Tadeu Tavares Carneiro is the owner of about 25 hectares of land, with sandy clay loam soil, which is considered appropriate for sorghum, corn and brachiaria grass (5) for animal feeding. Farmer has been focusing on goat production for both meat and milk, with a total of 45
animals. At present, he expends about US$ 60 per month to complement feeding to his animals, which usually graze in naturally grown species in the region, with much lower productivity during the dry season. He expects to avoid this periodical loss of productivity, costs of feeding material in the market, and to feed his whole herd with the above mentioned cultures, thus attaining a 30-40 liter daily production of goat milk. He has paid about US$ 150 for the drip irrigation kit and he will be allowed to give it back in case he is not satisfied. Regular technical assistance is still required to assure appropriate operations, including the right amount of water and procedures for ensilage. He was able to increase his herd since by adopting this highly efficient system for productive use of water.
Farmer Jailson Araujo has chosen to plant gumbo (scientific name Abelmoschus esculentus (L.) Moench, from the Malvaceae family). He planted and sold gumbo for several years now, and his usual harvest was no higher than 200 units per week, while the irrigation there are indications that he may attain 2,400 units per week, while splitting the area in two plots in order to make one harvest per month. According to him, the main obstacle to increasing production was related to manually wetting the plants, a work that will be unnecessary with drip irrigation through gravity. He expended US$ 230 in the acquisition of the irrigation kit and other peripheral pipes to bring the water from a reservoir that is located at about 150 meters. An electric pump was installed and he receives his electricity from the grid.
Data gathering led to structuring the financial model that can be find in Attachment I. Initial results indicate that payback can take from less than 1 year to 4 years, mainly depending on the chosen product, which was a decision made by the small farmers themselves. Such payback periods can be further reduced if (a) the use of solar panels is not restricted to water pumping (as both solar panels and water panels have been accounted for with a single use), (b) one goes to larger areas from current modules of approximately 500 m2, and (c) goats are kept in stables, rather than left to graze in open areas (6).
Sources of local financing
Once pilot projects came to a point in which it was possible to make it clear that a high IRR could be expected, several initiatives were taken by the private sector. On the one side, an importer of solar panels started to deliver the whole system in one single package – meaning the solar panels, the pump, and the drip irrigation system. On the other, manufacturers of pipes understood the potential and size of this market – drip irrigation for small farmers – and started working with the regional development bank in order to list this technology for micro-credit and other existing credit lines for family
agriculture. Dissemination, the original aim of the project, will soon be attained.
Indeed, the National Program for Family Agriculture, known by its acronym – PRONAF, a highly complex lending program mainly focused on former landless who got their rural plot from the government. Rates of interest are low – 4% and less if payment of installments are made within schedules -, and payback can be of 1-2 years. It is a beginning, if one considers the lack of effective support for small farmers under current micro-credit lending programs. Just for analytical purpose, no more than 40.000 loans were made in 2004, while most subsidized loans under other programs goes to much larger land owners.
Different sources of credit are however appearing, from rural credit cooperatives to “people’s banks”, and the LaGuardia Foundation is working in identifying such sources.
The cost-benefit analysis has proven that small farmers can earn a decent living even in the poorest arid areas. Now, let’s hope governmental agencies will do their share.
(1) - These opportunities have been immediately seized by main distributors of solar panels in Brazil after an initial stage of consultation with project management. BP demonstrated such interest that a site visit was made by the CEO of its Brazilian branch. Two of such distributors cut deals with manufacturers of water pumping to sell complete packages or kits. Manufacturers of pipes for drip irrigation did not, however, demonstrate much interest since at present there is a buyer’s market for their products.
(2) - It is worth quoting the head of FAO’s Brazilian office in a recent personal interview: “for most areas, Brazil does not lack technology in what concerns rural production, but appropriate diffusion (technical assistance on the ground) and financial mechanisms to assist small
and/or poor farmers”.
(3) - It is however worth noting that potential uses of PVs in the Brazilian Northeast are much broader than what official statistics report. Indeed, the understanding of the power sector is that “universal access to electricity services” refers to the provision of electricity at the household level.
Knowing the region a little more in depth it is easy to identify numberless places in which grid-connected houses are built along roadsides while agricultural plots less than one mile away lack electricity for pumping and related activities.
(4) - The final letter B in the acronym comes from a time when APAEB was founded as the first small farmers’ association of the State of Bahia. Its success led to the creation of similar associations, it was renamed after the Municipality of Valente, but kept its original acronym as a landmark for its pioneering in changing the economics and the culture of the region.
(5)- All these species have been extensively researched by EMBRAPA – the National Research Center for Agriculture and cattle farming. EMBRAPA is a state-of-the-art research center with very little structure for technical assistance, and no technical assistance for small farmers. It runs
different, specialized research centers all over the country and results of its researches may be found it its web page at www.embrapa.br.
(6) - An additional pilot with PV pumping was made in the community of Traíras, State of Alagoas. This pilot – now fully operational – has been however delayed due to heavy rains that caused devastating floods in mid-2004. Therefore, economic and financial data related to this project has not been considered in the financial model, and will be added to it before meetings with the regional development bank (BNB).
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