Financing smallholder farmers engaged in small-scale irrigation: the case of Offa Woreda: Wolaita zone, federal democratic republic of Ethiopia
Student name: Mr Aynalem Tadesse Dada
Guide: Dr Smriti Das
Year of completion: 2018
Host Organisation: Federal Ministry of Agriculture, Ethiopia
Supervisor (Host Organisation): Mrs Nigist Kebede
Abstract: Agriculture, mainly the smallholder farming is the most dominant subsector in the Ethiopian economy. Its contribution to employment creation, total factor input, total output, and export earning is irreplaceably high in the present scenario. Yet, Ethiopian agricultural sector, as in many other developing countries, is characterized by a heavy dependence on natural rain. Its rainfall pattern is erratic and is increasingly unpredictable over time. Although the current government is committed to capitalize on agricultural development – mainly the smallholder chunk of the sector by allocating a significant amount of the national budget (15-20%) for agriculture, and as a result experiences a promising overall economic growth over years, it could not bring structural change on its economy. Rural infrastructures, availability farmer-friendly credit facility, crop insurance, etc. are lacking/very limited in many parts of the country. This study is conducted in Woshwocha Dekaya rural community in the SNNPR, Ethiopia to identify major challenges of smallholders engaged in small-scale irrigation, issues of sustainability, mapping the financial institutions and their financing mechanisms and investigate the potential roles of small-scale irrigation in impacting the livelihoods and food security of the farming families and the larger consumer community. For so doing, intensive household interviews, Key Informant Interviews, Focus Group Discussions, and relevant literatures are reviewed to build the conceptual framework. Financial constraints, shortage of water/irrigation facility, youth migration, land fragmentation and degradation, etc. are among the leading problems of smallholders engaged in irrigated agriculture and weakness of WUA committee, lack/unaffordability and less timeliness of agricultural inputs, lack of easy and lubricated marketing linkages, information asymmetry, crop insurance are the main post-facto problems. As revealed by the study, formal financial institutions in Ethiopia and the study areas are both „town based‟ and „town biased‟ respectively in their positioning and credit priority, and the rural informal sectors (e.g. RUSACCOs) are disabled and toothless, that it needs pragmatic intervention to capacitate them via training the leadership, financing, monitoring and evaluation.
Key Words: Agriculture, Credit Facility, Financial Institutions, Food Security, Micro Finance, Smallholder Farmers, Small-scale Irrigation.
