Boosting Water Productivity in Agricultural Sector. Engro Polymer and Chemicals Limited

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1 Boosting Water Productivity in Agricultural Sector Engro Polymer and Chemicals Limited Background: Pakistan s economy heavily depends on the output of the agricultural sector which constitutes 20-25% of GDP. Apart from providing input to a large portion of manufacturing sector, it provides direct employment to more than 40% of labor force. Agriculture sector in Pakistan is plagued with a number of issues which include flat yields, under investment in rural infrastructure and research and technology, and low water productivity. Despite all its challenges, the sector has been providing sustenance to country s economy so far. Today, arguably the single largest threat to the agricultural sector of Pakistan is shortage of irrigation water. Pakistan is already a water stressed country with large scale degradation of resource base. Groundwater is now being overexploited in many areas and dependence on ground water is increasing every year. Climate change and political fallout of building large reservoirs provide no solace to the scenario. The existing irrigation system has serious limitations. Due to age, lack of an appropriate Asset Management Plan, lack of investments, and poor quality of project implementation in public sector has made the existing system vulnerable. Financial viability of the system is not sustainable as users pay a very small portion of the cost and government has to inject money on regular basis. It appears that unless some drastic measures are taken, the agriculture sector in Pakistan, particularly non-canal and rain-fed areas, will further deteriorate in water productivity. Fortunately, there have been some encouraging developments to control water losses and improve water productivity. These include introduction of High Efficiency Irrigation Systems (HEIS), use of polyvinyl chloride 1 (PVC) pipes for water conveyance, and lining of water channels and reservoirs with PVC geomembrane. Introduction to Water conservation technologies: HEIS refers to irrigation methodology which optimizes the use of water by allowing water to drip slowly in root zone of the plant through a network of pipes, valves, and emitting devices. It is an established methodology of increasing water productivity by avoiding seepage and evaporation losses. It has been successfully demonstrated all over the globe, particularly in countries where water resources are scarce. It involves designing and installation of demand-based system in the farm to provide right quantity of water to each plant. A typical system considers crop s water requirement, condition of soil and water, climatic conditions, and other factors like farm size etc at the design stage. The designer designs the suitable solution for the farm which includes the type of emitting device suitable for the crop. There is a wide variety of emitting devices with different discharge rates like drippers, micro tubes, bubblers, and sprinklers etc. HEIS offers a large range of benefits at the farm level. It brings in efficiencies in virtually all farm inputs most important being the water efficiency. Flood irrigation- the traditional method in use in Pakistan normally achieves 30% efficiency whereas efficiency through HEIS can go as high as 95%. With uniform and consistent water supply, crop or orchard does not go under stress and produces more fruit of uniform size. More yield and greater produce of high grades 1 PVC pipe does not rust, rot, or wear over time. For that reason, PVC piping is most commonly used in water systems, underground wiring, and sewer lines. Engro Polymer and Chemicals Limited 1 P age

2 has direct impact on improving farmers economics. In orchards in Pakistan, payback period of a typical HEIS system, having a life of years, ranges from one year to three years. Additionally, efficiency is also achieved in fertilizer application. PVC Geomembrane on the other hand offers a seepage proof lining arrangement for the storage and delivery mechanism of water. It can be used in lining canals, watercourses, and reservoirs. PVC Geomembrane offers affordable and easy to install solution for water conservation for delivery system losses. Typically, earth covered Geomembrane lined reservoir costs one-third the cost of concrete reservoir with a longer life. PVC pipes are used in agriculture sector for various applications like tube well casing, conveyance and distribution and micro irrigation systems. Their benefits include low cost, non corrosive nature, durability and ease in installation. Project Goals: The targeted users are all farmers and crops. Segment to be targeted first is non-canal, rain-fed areas with high-value crops like orchards and vegetables etc. This excludes subsistence or non-commercial farming. Short term goals include conducting awareness activities, ensuring successful completion of ongoing projects, and awareness and training of various stakeholders. Longer term goals include sustainable supply of trained human resources from educational and skill development institutions, profitable business for supply companies, awareness in users, and availability of financing (through government, non-governmental, or commercial) for installation of water conservation technologies development of industry with market forces in action. Time Line: History of HEIS industry in Pakistan dates back to the 1980s when a few installations took place mainly in Balochistan. However, most of these systems could not survive due to absence of channels for HEIS maintenance and expertise in the country. The concept of HEIS was revived in early part of this decade in private sector through efforts of Engro Polymer & Chemicals Limited (EPCL). Since then EPCL has been working on multiple fronts for development of the industry. EPCL has been advocating the use of water conservation technologies at government level for quite some time. Mainly because of these efforts, the Government of Pakistan has recently launched its largest ever project through the Ministry of Food Agriculture and Livestock which aims at bringing more than 275,000 acres under micro irrigation in a period of five years. The government is subsidizing the installations with a subsidy of Rs.35,000 per acre in commercial phase. With completion of this project, it is expected that the industry would take off and will become self sustaining. Additionally, in 2007 and 2008, non-governmental funding, primarily from Pakistan Poverty Alleviation Fund (PPAF) has been directed to installation of HEIS systems all across the country through their partner organizations. The role of non-governmental organizations and donoragencies will augment the establishment of self-sustaining industry. The Approach Taken: With reintroduction of HEIS concept in 2001, EPCL started working on multiple aspects of industry. By virtue of being sole PVC resin manufacturer in the country, EPCL was already supporting the local pipe manufacturing industry. PVC pipe constitutes important component of a typical system and therefore a few of pipe manufacturers were developed to build supply chain for the rest of components and provide solutions on turn key basis. Engro Polymer and Chemicals Limited 2 P age

3 This was a slow, tedious process. Learning from the failures of HEIS experience in 80s, it was decided that EPCL has to work on developing the indigenous capacity for sustenance. Pakistan has adequate capacity to produce PVC pipes; however other components like lateral lines and emitting devices were not being produced locally. EPCL started tapping international sources and short listed a few suppliers based on their quality and prices. These include Irritec & Siplast, Italy, Alwassel, Saudi Arabia, Raindrop, Thailand, and Kommet, Italy. EPCL arranged visits and seminars for the representatives of some of these suppliers in order to give them a first hand feel of emerging market for their business lines. As a result, all these international manufacturers now have regular supplies in the local market. EPCL continues to play its role as an enabling body for maintaining this vital link in supply chain. In parallel, programs for better quality production of PVC pipes in Pakistan are being run which include products like lead-free pipes. The second important aspect on supply side was to develop indigenous technical know-how. Unfortunately in Pakistan, no educational institution offers specialized courses in design and implementation of high efficiency irrigation systems. A core team of design and installation expertise was developed to kick start the project. With continued focus on this aspect, EPCL today has training facilities in Karachi, Quetta, and Peshawar for capacity building of various stakeholders which include government officials, industry professionals and students. These training programs have helped supply companies in maintaining knowledgeable workforce and increase installation capacities. To increase the base, EPCL has procured text books of certificate courses in system design, installation, and quality audit from Irrigation Association USA and is currently exploring partnerships with agriculture universities and other institutions to start a formal skill certificate program. On demand side, EPCL has been actively engaged in setting up demonstration sites at strategic locations where host of field activities are held on regular basis. Farmers, opinion leaders, and associated professionals are invited to awareness seminars and field activities. During these field activities, demonstrations of water conservation systems are carried out. Realizing the issue of high investment of micro irrigation systems, EPCL has been active in tapping donor funds also. EPCL s regional teams are actively engaged with a number of NGOs that are working for water conservation, livelihood improvement and agricultural capacity building. These NGOs have penetration at community level and with funding from social investment organizations like PPAF, USAID, and CRS, they have been instrumental in introduction of technology in their geographies. EPCL is in regular contact with leading financial institutions in the country to help them develop financial products which can help farmers get loans for financing the installations. In parallel, advocacy with government institutions has been a regular feature. EPCL has supported the launch of Government of Pakistan s largest ever HEIS project at all stages from conception to recent roll-out. Interactions with other government institutions have resulted in successful roll-out of projects like Governor Balochistan s HEIS program and SMEDA Balochistan s project. Another important aspect of EPCL approach is the indigenous production capacity of components that are currently being imported. EPCL has got emitting devices like bubblers of various sizes, drippers, and micro sprinkler developed locally through engaging mold manufacturers. Engro Polymer and Chemicals Limited 3 P age

4 EPCL is engaging other supply companies which have established the business on their own and offering its support. The plans include signing of Memorandum of Understanding (MoUs). Currently MoUs with Dadex Eternit Limited, Valley Irrigation Pakistan (Pvt) Ltd., and Microdrip Pvt. Ltd. are at advanced stage. Achievements and Challenges: Through EPCL s active support, today three companies covering almost entire national geography offer micro irrigation solutions on turn-key basis. Additionally, three installers for PVC geomembrane lining have been developed. EPCL is also in process of supporting other supply companies and programs for their support are being developed. Field activities sponsored by EPCL and partner organizations have played an important role in awareness. Since last six years EPCL has conducted approximately 120 farmers gathering and established 35 demonstration sites all across the country. The roll-out of government projects and engagement of not-for-profit sector has increased the reach of supply companies to areas where operational challenges were immense. The challenges for HEIS industry are tremendous. The shortage of skilled manpower, reach to customers, financial viability of supply companies in scenario of rising import costs and adaptation of systems to local infrastructure are among the greatest challenges. Agriculture universities and skill development institutions need to start offering certification courses for the industry to develop the adequate local knowledge base. Local manufacturing of components also needs to be promoted to bring the overall cost of systems down and increase the appeal of HEIS for an average Pakistani farmer. Lessons Learnt: A consistent, methodological approach pays off best in the longer run. EPCL had thoroughly analyzed the failures of earlier experiences and learnt a great deal in avoiding the same mistakes. As a part of process entire value chain was analyzed to attain longer term sustainability. The importance of market forces and financial viability of supply companies in establishment of industry was realized from the start. The efforts on both demand and supply sides were directed to alignment with market forces. With this supply companies can operate independently without any regular support. The importance of customer perspective and adaptation of any technological solution to local environment is crucial for successful conversion. Any attempt to introduce sophisticated HEIS system at start would not have created a buy-out at farmer level. Future Plans: Decreasing availability of water in Pakistan has made the use of water conserving technologies a necessity. It is a matter of survival of largest sector of the economy and therefore, use of HEIS will increase. The critical elements which will determine the pace of developments will be public policy, reach and effectiveness of awareness activities, and financial viability of supply companies. With introduction of modern farming practices and technologies, Pakistan s agri-sector can overcome current challenges and perform to its full potential, helping Pakistan achieve self sufficiency in food production. EPCL s focus will remain on longer term objectives of making HEIS industry sustainable by ensuring supply of trained human resources, profitable business opportunities for supply companies, and creating awareness among end-users. Engro Polymer and Chemicals Limited 4 P age

5 Contact Details: Sarah Aziz HSE Engineer Engro Polymer and Chemicals Limited Cell: Engro Polymer and Chemicals Limited 5 P age