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OPIC Helps Farmers Flourish with Access to Water

By Overseas Private Investment Corporation

Water is essential to life. Water is also essential to agriculture.

Access to water has a crucial impact on farming practices and food production. In many countries where Feed the Future works, smallholder farmers struggle with the limited availability of water and are dependent on a generous rainyseason. If the rains come late or only sporadically, farmers see little to no crop yields, and the community is left with food shortages. The unavailability of water also limits farmers’ ability to practice subsistence agriculture that can provide food all year round. 

To solve this problem, the Overseas Private Investment Corporation (OPIC), a Feed the Future interagency partner, is developing innovative approaches to increase water access by partnering with private companies that can reach the world’s most vulnerable farmers.

In 2011, OPIC provided a $4.75 million loan to the Participatory Microfinance Group in Africa (PAMIGA), an impact investment microfinance institution. PAMIGA’s microfinance facilities offer loans to farmers in countries such as Kenya and Tanzania so that they can extend their agricultural activities throughoutthe dry season.

PAMIGA is providing both capital and technical trainings to individual farmers in water-insecure communities. This enables them to buy and implement irrigation systems on their land so farmers can grow crops throughout the year. It also drives up the profitability of agriculture, as farmers produce more and sell their goods during the dry season at up to five times the price they would have fetched during the rainy season. The loans are expected to reach almost 100,000 farmers.

Irrigation systems, and the knowledge to implement and operate them, are also yielding incredible benefits to communities that rely on agriculture for income and nutrition. In Tanzania, farmers supported by PAMIGA are helping to combat chronic undernutrition, the largest contributor to mortality for children under five. Communities are increasing the availability of nutritious food for their children, and are now farming in areas where it was previously impossible to do so. In Kenya, where only 20 percent of the land is arable and suitable for growing crops, this is a boon to the local economy and the health of families.

Helping smallholder farmers move out of subsistence farming is creating long-lasting development impacts and making communities more resilient. Before, farmers worried about being able to produce enough for their families to survive throughout the year. With sustainable farming practices, food producers are increasing yields and building buffers against poverty as they enter new markets to sell their products. Farmers are improving their livelihoods and can better secure their futures—even if the rains don’t come.

The Overseas Private Investment Corporation is one of 11 agencies and departments working together under Feed the Future to combat global hunger and poverty. OPIC mobilizes private capital to help solve critical development challenges. The agency works with American small businesses and companies to help them enter new markets, fosters economic development in emerging market countries, and advances U.S. foreign policy and national security priorities.

 

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