Supply sideGerdien Meijerink LEIIna Porras IIEDFred Muchena ETCDavis Onduru ETCEvelyn 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, 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?

Elements of the study

Institutional and stakeholder mapping Profile of potential suppliers Upstream Costs and benefits of SWC Farmer willingness to participate in GWC

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.

Preliminary results

Household surveys available:

MACHAKOS 20 NYERI 18 EMBU 10 MBEERE 1 Total 58

Selection of target areas

Farm households: suppliers

In general:High education levelSmall farms (< 1 ha)High number of household members

(7 per hh)Labour availability (4.6 persons per

ha)

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

cropsGross margins differ from 400 US$/ha to

2000 US$/haShare of non-farm income (average 30-40%)Slopes of plots (flat to 47%)

Soil and water measures

Data only available for Kiambu, Mbeere and Githungi (Total 80 plots) Fanya yuu 68% Grass strips28% None 4%

Level of maintenance? Scope for extension and or improvement?

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

Trade-offs

Depends on the measures taken:1. Enhance productivity (through SWC)

• Will increase water use but reduce sedimentation

2. Lower productivity (reduce irrigation…)

1. Increase labour costs for investment & maintenance of SWC structures

2. Need to achieve certain amount of produce: Food security Sales in local markets Fulfill obligations of exporter/contractor

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

Contracting, monitoring and payments

Thank you

End