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Supply side

Supply side. Gerdien Meijerink LEI Ina Porras IIED Fred Muchena ETC Davis Onduru ETC Evelyn Kaari Njue ETC. Background – collaboration of IIED, LEI, ETC. Socio-economic feasibility on the supply side of green water credits: How will upstream farmers benefit from a GWC scheme,

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Supply side

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  1. Supply side Gerdien Meijerink LEI Ina Porras IIED Fred Muchena ETC Davis Onduru ETC Evelyn Kaari Njue ETC

  2. Background – collaboration of IIED, LEI, ETC • Socio-economic feasibility on the supply side of green water credits: • How will upstream farmers benefit from a GWC scheme, • Which institutions can facilitate farmers’ supply of environmental services and manage payments • What is the likelihood of farmer participation under different design options of the scheme?

  3. Elements of the study • Institutional and stakeholder mapping • Profile of potential suppliers • Upstream Costs and benefits of SWC • Farmer willingness to participate in GWC

  4. Methdology: Field research in the upper Tana basin • Focus groups • Existing institutions working in the area and farmers’ attitudes towards them • Current practices in relation to SWC • Barriers to and opportunities for introducing SWC practices • Constraints in water use and supply • Current channels for access to micro-credit and cash transactions • The household survey • Builds on LEI’s MONQI methodology (monitoring questionnaire and associated software) • Indicators for household (livelihood) and farm management • Choice modelling element • Farmers’ preferences for different packages of compensation involving different mixes and levels of payments, credit and in-kind benefits such as technical assistance, community development projects as well as different length of contracts.

  5. Preliminary results • Household surveys available: • MACHAKOS 20 • NYERI 18 • EMBU 10 • MBEERE 1 • Total 58 • Selection of target areas

  6. Farm households: suppliers • In general: • High education level • Small farms (< 1 ha) • High number of household members (7 per hh) • Labour availability (4.6 persons per ha)

  7. Farm households: suppliers • Area is characterized by great diversity: • Cropping systems (tea, coffee, maize-beans, small-scale irrigation, livestock) • Small plots are intercropped with 2 or more crops • Gross margins differ from 400 US$/ha to 2000 US$/ha • Share of non-farm income (average 30-40%) • Slopes of plots (flat to 47%)

  8. Soil and water measures • Data only available for Kiambu, Mbeere and Githungi (Total 80 plots) • Fanya yuu 68% • Grass strips 28% • None 4% • Level of maintenance? • Scope for extension and or improvement?

  9. Institutional analysis • Credit organizations: • Most small farmers are not eligible for loans from or savings accounts at banks • Revolving fund (group savings and credit) • Extension organizations: • Close relationships with Social Services (MoA) • Group formation and capacity development, technical advice • Donor organisations (GTZ, IFAD) • Private sector (Bayer, pesticide sellers) • Export contractor • “Self help” groups • Farmers organize groups around an economic theme • Only successful if there is a clear economic incentive to join and comply with rules

  10. Trade-offs • Depends on the measures taken: • Enhance productivity (through SWC) • Will increase water use but reduce sedimentation • Lower productivity (reduce irrigation…) • Increase labour costs for investment & maintenance of SWC structures • Need to achieve certain amount of produce: • Food security • Sales in local markets • Fulfill obligations of exporter/contractor

  11. Incentives required • See SWC as a means to an end: economic tangible benefit • “Payment” for service: • Training & information sharing (transitional cost) • Implements, tools • Revolving fund administered by self help groups • Option of no irrigation – compensation payments?? • Cooperation is key

  12. Contracting, monitoring and payments

  13. Thank you • End

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