Ahead of the UN 2023 Water Conference, the International Fund for Agricultural Development (IFAD) calls for accelerated investments to help small-scale farmers in developing countries access and manage increasingly scarce water resources in the face of a changing climate and more extreme weather events.
“There is no food security without water security. Water is indispensable to produce food but small-scale farmers increasingly struggle to access the water they need to grow their crops and feed their animals, leading to human suffering, migration and conflict,” said Jyotsna Puri, IFAD Associate Vice-President, Strategy and Knowledge Department. “Solutions exists, but investments are needed to help millions of small-scale farmers access them.”
About 3.2 billion people overall live in agricultural areas with high to very high water shortages or scarcity of which 1.2 billion people – roughly one-sixth of the world’s population – live in severely water constrained agricultural areas. While small-scale farmers produce one third of the world’s food and up to 70 percent of the food produced in developing countries, they increasingly face water challenges due to climate change. Since 2000, the number and duration of droughts has increased by 29 percent. Population growth causes an increased demand for water, which is also a key driver of water scarcity.
“The only solution is to make the best use of every single drop. Small water infrastructure, better soil and water management, and natural solutions such as agro-forestry can go a long way in ensuring small-scale farmers have the water they need,” added Puri. “We need to increase investments from the public and private sectors to accelerate the uptake of proven techniques, and local solutions.”
Investment needs are immense. For example, in East Asia and the Pacific, US$6.8 billion are needed each year until 2030 for irrigation expansion and efficiency and water management improvements to be at full efficiency.
According to the OECD, despite a strong economic case for water investments, financing flows are not commensurate with investments needs. For example, in Sub-Saharan Africa, although expanding small-scale irrigation can be profitable and benefit between 113 and 369 million rural people, access to finance and credit is a major barrier to access irrigation and water harvesting equipment, in addition to land tenure issues.
“Given the amount of financial need and the intensification of climate change, we must further develop innovative financial instruments to unlock billions from the private sector, sooner rather than later, and channel funds, infrastructure and know-how to small-scale farmers,” added Puri.
Blended finance, which strategically uses development finance to mobilize private investments, sustainable or green bonds, and public-private partnerships, are examples of financial instruments. IFAD is also advocating for the development of water bankable projects with clearly defined revenue streams and viable business models to attract private investors.
IFAD is a major investor in small-scale farmers’ water solutions. IFAD’s ongoing investments in water projects and activities amount to US$2.85 billion. IFAD-supported projects invest in water tanks, rain water harvesting systems, agroforestry, soil management technics that maintain soil humidity, small irrigation systems and drip irrigation, and also natural solutions such as agro-forestry and ecosystems restoration. IFAD also works closely with rural communities, local governments and water providers to help improve the allocation and management of water resources.
IFAD strongly promotes a nexus approach looking at water, food security and energy jointly to identify best local solutions when designing projects together with local communities.