Collaboration framework: strengthen the glue

This case study is referred to in the report, Collaboration: Preserving water through partnering that works. There is one for each step of the Collaboration Framework. Click on the step you would like to find out more about to read the supporting case study.

  1. Start off on the right foot
  2. Get the system going
  3. Strengthen the glue
  4. Maintain momentum

Cotton is one of the most important cash crops in the world and despite the development of synthetics, cotton remains one of the most important fibres. India is the second largest producer of cotton globally. But, cotton is one of the most water consuming crops because of the frequent flood irrigation needed in its production.

The Problem

Click to see the full collaboration framework
Find out how to ‘strengthen the glue’

If flood irrigation is replaced by drip / micro irrigation systems (MIS), water consumption can be reduced by as much as 50%. The adoption of MIS by Indian cotton farmers had for a long time been limited. So the challenge was to increase adoption of MIS by cotton farmers in India.

The stakeholders

The stakeholders in this challenge –

  • The farmers themselves (as individuals and as groups / communities)
  • The textile / furnishing brands selling cotton based products in the global markets
  • International developmental institutes
  • MIS companies
  • Financial institutions that fund / finance the procurement of MIS equipment by farmers
  • Cotton value chain players i.e. the ginners / spinners / traders etc
  • The Governments (local and national) were interested as declining fresh water availability is a national as well as local concern
  • NGOs and other not for profit organisations that work with the farmers on various issues

How did they collaborate to address the challenge?

First, they identified the key reasons for the low adoption rate by conducting a study to establish farmers’ understanding of the relevance of MIS systems in the cotton value chain.

The key findings of the study were:

  • Cost of irrigation was 20% of total cost of cultivation
  • Irrigated farms showed 3 times the amount of profit as compared to a non-irrigated farm
  • Drip irrigation was considered as one of the key measures for sustainably growing cotton in the future
  • The awareness of the farmers about the benefits of MIS was very high
  • The low adoption rate was driven by a lack of financial resources

The next stage was to develop the access to finance projects that would enable farmers to adopt the MIS systems.

Impacts and Outcomes

In the pilot areas 300 farmers were given access to finance through support from regional NGOs throughout the borrowing process. Banks supported the project, pre-sanctioned the loans and helped fast track the lending process. The banks also provided lower rates of interest compared to regular loans, reduced margin and security requirements and reduced the documentation requirements for the farmers.

In a drought year, when the sales of MIS systems declined in the pilot area the sales levels were sustained.

Enablers: What helped the collaboration work well?

  • The team provided by PwC was multi-disciplinary and had expertise in agricultural issues, technical knowledge of MIS systems and significant understanding of the banking sector along with a strong network within the financial sector
  • Diverse groups of different stakeholders (Banks, MIS companies, IFC, Retail Brands), supported the programme
  • In India the Reserve Bank of India (RBI) has stipulated priority sector lending norms for all commercial and state owned banks. Under these norms the banks have to undertake direct agri lending in order to fulfil the PSL norms.