SwitchON Foundation has initiated and built award-winning social enterprises and incubated a network of over 500 rural entrepreneurs and micro-enterprises since 2008
Published on December 20, 2020 at 4:01 am
Updated on March 20, 2021 at 06:48 am
In East India, the irrigation facilities available to farmers are far from adequate – only one-third of the cropped area under irrigation – which is unreliable, often with diesel which is both expensive and polluting. Use of diesel irrigation pumps emits a large amount of Green House Gas (GHG) emissions causing climate change. Water scarcity is a critical constraint to farming and livelihoods of millions of people but current irrigation practices are depleting groundwater. In addition to this, one-third of the world’s malnourished children and one-fourth of the global malnourished population live in India.
Solar irrigation has emerged as one of the most technically and commercially viable product for productive use. While it has been promoted actively in India for over two decades, it has failed to reach its potential with only 0.5% irrigation pumps powered by solar in the field. The government has introduced credit linked subsidy schemes in the past to promote solar pumps but these schemes did not succeed mainly because financial institutions were not willing to finance “un-bankable” customer for a “risky” technology they didn’t understand or had negligible knowledge or exposure.
SwitchON Foundation, a leading not-for-profit operating in East India, was quick to realise that for this promising technology to scale access to finance was the key bottleneck through its work of demonstrating the technology demonstration since 2014 in collaboration with organisations such as NABARD and GIZ. Understanding the gap of access to finance, it created a First Loss Default Guarantee (FLDG) fund with the support of Pacesster Fund (US Embassy and Ministry of New and Renewable Energy) and Good Energies Foundation and partnered with RBL Bank and Axis Bank to facilitate bank financing of solar irrigation pumps for small farmers.
The FLDG is used to de-risk the lending by commercial banks and allow the farmer to easily avail a loan for solar pumps at lower-than-market rates. Under the project, 50 solar pumps have received loans under the FLDG and have been set up, benefitting over 750 small farmers. SwitchON Foundation also became a Business Correspondent (BC) with RBL Bank, allowing it to extend service and provide loans to small farmers in remote areas. SwitchON Foundation with the setup of the FLDG and BC has created an entire financing ecosystem, ensuring access to solar pump and financing to marginal farmers who are organised into a Joint Liability Group (JLG) or Water Use Group (WUG) under a Solar Entrepreneur (SE). SEs or JLGs come forward to a take a bank loan either individually or through the group mechanism against the mutual guarantee.
There has been a phenomenal socio-economic and environmental impact on the beneficiaries with the introduction of solar pumps. In India, diesel cost has doubled in the last 10 years and tripled in the last 15 years. In East India, small farmers depend heavily on diesel pumps for their irrigation and the overall cost of irrigation (30-35%) is often one of the most expensive cost centres in agriculture production value chain, along with expense towards labour and agriculture machinery hire – much more than any other agriculture inputs. By replacing a diesel pump with solar irrigation, even after paying a monthly instalment to commercial banks under no subsidy, farmers have a savings of 25-30% on the cost of irrigation.
Besides the income from savings, by making irrigation accessible to small farmers through the introduction of solar pumps, we see a two-fold phenomenon:
Revival of agriculture – East India is known for fertile land, but because of an increase in the price of diesel, farmers stopped the practice of doing three crops per annum. But with the introduction of irrigation due to solar, the third crop is being grown again by small farmers, which can contribute to 25% additional revenue from agriculture per year.
Better harvest and increase in cropping intensity – In India, cropping intensity is amongst the lowest globally and a lot of it is attributed to lack of irrigation facility. Reliable irrigation from solar pumps has contributed to better harvest by as much as 15%, hence having a positive impact on agriculture income by up to 20%.
Solar pumps can have a tremendous contribution to not just in the reduction of GHG emissions from the use of diesel pumps but also reduce widespread farmer distress and agrarian crisis which is affecting over 600 million people in the country. While there is a clear need for diesel pumps to be replaced with solar pumps, wherever irrigation pumps have been adopted, it is seen that it adversely affects the groundwater situation, because of the indiscriminate use. Climate change and depleting groundwater have become the biggest threat to livelihood and food security. Central Ground Water Board (CGWB) states that agriculture is the biggest consumer of groundwater, accounting for 91% of all withdrawals. A third of Indian districts are under water stress and worsening climate could reduce our farm yields by 15-18 per cent on average and 20-25 per cent in un-irrigated areas by the end of the century. India stands at a complex challenge of ensuring food security with minimal environmental impact for a rising and underserved population in a rapidly changing climate.
To ensure food security while respecting planetary environmental boundaries, SwitchON Foundation is setting up Programme SEWA (Strengthening the Energy-Water- Agriculture Nexus in East India), which is key to sustainable development. The growing demand for each of the above is increasing and putting pressure on the planet. Agriculture consumes the most amount of freshwater resources in the world and 25% of the energy used globally is expended on agriculture production and supply chain.
Under Programme SEWA, projects would be taken to promote and showcase successful models of solar pumps, water conservation, groundwater recharge and water harvesting in combination with precision or micro-irrigation. To ensure its conservation, we will promote and showcase successful models of solar pumps, water conservation, groundwater recharge and water harvest along with utilising other alternate energy resources available in the surroundings.
SwitchON Foundation has initiated and built award-winning social enterprises and incubated a network of over 500 rural entrepreneurs and micro-enterprises since 2008. It is uniquely placed to work on this project as it has rich experience in promoting farmer producer companies in collaboration with SFAC (Ministry of Agriculture, GoI) and NABARD and has proven experience in incubating and helping scale award-winning social enterprises work in Clean Energy Access (ONergy Solar) and Sustainable Agriculture (ONganic Foods) and promoting Solar Water Entrepreneurs / Water User Groups by facilitating bank financing and getting them access to solar pumps through the setup of a guarantee fund.