With GPOBA’s $5.85 million grant agreement signed on February 21, 2018, small-scale cotton farmers in western Burkina Faso’s semi-arid region will receive support for better land management and irrigation practices, procurement and installation of irrigation equipment, and credit financing to stem the effects of climate change and stabilize production. This four-year program (to be launched April 2018) developed in collaboration with IFC is part of the World Bank's Sahel Irrigation Initiative -- is GPOBA’s first project in Burkina Faso and in direct support of irrigation. The collaborative World Bank-IFC-GPOBA efforts seek to optimize the use of available resources to mitigate the negative effects of climate change on cotton sector productivity by training about 1,000 small-scale cotton farmers in land and water management, investing in small-scale irrigation systems, and facilitating farmers' access to credit.
This funding will benefit farmers’ cooperatives affiliated with SOFITEX (Société Burkinabé des Fibres Textiles), which is responsible for more than three-quarters of the country’s cotton production. Burkina Faso is the largest cotton producer in Sub-Saharan Africa, with cotton's being the country's second most important export commodity in terms of revenue generation ---- yet small-scale farmers have been wholly reliant on rainwater for cultivation, leaving harvests’ fate subject to the extremes of either drought or flooding from excess rainfall.
GPOBA PROJECT COMPONENTS
As irrigation farming represents both a technological and cultural shift for these small-scale farmers, GPOBA and the IFC's Advisory Services will co-finance farmers' training on best agricultural practices for soil fertility and water management, water evaporation reduction, compost preparation, and erosion control. With just over half of the world’s cotton production's relying on irrigation, these farmers are poised to increase their ability to compete on the international market. By making better use of water and increasing soil capacity, land fertility and production over several crop cycles are expected to improve (perhaps as much as 30-80%) -- thereby reducing the risk of desertification -- while potentially boosting cotton production and farmer revenues.
A second project element finances procurement and installation of small-scale irrigation systems (i.e. reservoirs, stone contours, water collection lines, irrigation equipment) for areas up to 3 hectares. Farmers who successfully implement these capital investments and meet project milestones -- upon verification of their functionality, and payment of the first loan installment to their lenders --- can be reimbursed up to 80% of their investment costs.
The project’s third component helps the farmers who apply early to access market finance through a partial risk facility. GPOBA will provide the initial funds for this facility, after which other financial institutions may fill this role. GPOBA’s grant will help mitigate some of the risks such as natural disasters, loan payment default, and incomplete project implementation by compensating up to 50% of the lenders’ losses and commitment to pay up to half of the fees for purchasing market-based risk-mitigation products. The subsidy will also help farmers pay 80% of the interest of the first year’s loan to the lender.
GPOBA looks forward to this project’s success and will be closely monitoring its outcomes, and anticipates this to be a model to be replicated throughout the region and in other types of agribusiness through a blend of public and private financing.
*This program seeks to expand irrigated, sustainable, and productive agricultural that spurs job creation and increases food security in the Sahel’s rural regions. Click here to view a teaser video clip.
Related content: IFC's "Sowing Seeds of a Bright Future for Burkinabe Cotton Farmers"