ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Crop Per Drop of Diesel?

India's smallholder irrigation is in the grip of an energy squeeze and is proving the proverbial last straw on the camel's back. Marginal farmers and sharecroppers are particularly badly hit. Typically, they depend on pump owners for renting pumps, and even as prices have stayed put, the rental rates have risen in tandem with every diesel price hike because of the monopoly power of pump owners in these localised, village-level, informal oligopolies. Pump rentals have also tended to be downwardly sticky - they rise when diesel prices jump but stay put when fuel prices fall. This paper synthesises the results of 15 village studies to understand the impact of the energy squeeze and explores the desperate responses smallholders are forging to cope with or absorb the energy shock, and somehow stay in irrigated agriculture.

1 975-2000 was the golden age of smallholder irrigation in south Asia. Until then, much of the irrigation in the region depended on gravity ow, and was conned to the command areas of canal systems and traditional irrigation structures such as tanks, ponds and ahar-pyne systems. Since 1975, the spontaneous boom in private investment in small boreholes and mechanised diesel and electric pumps revolutionised irrigation agriculture taking it beyond the command areas to every nook and corner of the sub-continent. This happened at a time when growing population pressure made it imperative for marginal farmers to intensify their farming to ensure food for their family and liveli hood security. The mushrooming of local, informal and fragmented pump irrigation service markets, through which the poor could access irrigation from pump owners, vastly expanded the productivity and equity impacts of this irrigation boom. Govern ment policies supported the pump irrigation revolution through the expansion of institutional credit, a variety of subsidy schemes on borings and pumps, and support to farm electrication and electricity subsidies. While pumps and boreholes emerged as the mainstay of smallholder irrigation, new concerns about the threat of groundwater depletion, and adverse impacts of electricity subsidies on the viability of the electricity industry emerged. How to cool this overheated pump irrigation economy has emerged as one of the trickiest water policy issues in the region. Since 2000, however, all available evidence suggests that the regions groundwater economy has begun shrinking in response to a growing energy squeeze. This energy squeeze is a combined outcome of three factors: (a) progressive reduction in the quantity and quality of power supplied by power utilities to agriculture as a desperate means to contain farm power subsidies; (b) growing difculty and rising capital costs of acquiring new electricity connections for tubewells; and (c) an eightfold increase in the nominal price of diesel during 1990-2007, a period during which the nominal rice price rose by less than 50 per cent. In a 2002 survey of over 2,600 tubewell owners we carried out in India, Pakistan, Nepal terai and Bangladesh, our respondents unanimously ranked energy cost and availability as the top challenge to their farming, far above groundwater depletion, high rate of well failure, and rising groundwater salinity [Shah et al 2006]. Since the time of our survey, diesel prices

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