Large scale irrigation projects, especially for smallholder farmers, may have difficulty meeting the Economic Rate of Return (ERR) 10% hurdle rate. However, soft-side interventions, such as farmer trainings, and a strong focus on the market could boost farm incomes and the ERR. The final evaluation revealed that cropping intensity, rice production and vegetable production continued to be below compact targets in the Delta Activity area, leading to a 1.8% evaluation based ERR. Interviews revealed that some farmers perceived high risks in adopting new crops and farming methods, which may have constrained production and lowered returns. Given the incorrect assumption that another donor would conduct trainings and other agricultural support activities, the IWRM project was not designed with a complementary soft-side component. Closer analysis of potential markets may have also identified limits and opportunities for increasing production. MCC is applying this lesson in Niger, where the compact is supporting farmer services and trainings that address every step of the irrigated agriculture input, production, and marketing chains in large- and small-scale systems. Furthermore, the proposed Lesotho II compact is focused on meeting market demand and plans to support the irrigated horticulture sector by engaging with the private sector to identify sustainable market-based opportunities.
Lesson Learned