Sunday, April 21, 2024
NewsMinistry considers privatizing state-owned irrigation projects

Ministry considers privatizing state-owned irrigation projects

The Ministry of Irrigation and Lowlands is preparing a 25-year national irrigation policy that could entail the privatization of state agricultural projects such as irrigation dams as officials work towards the liberalization of food production in Ethiopia.

The policy, which is still in the works, was unveiled during a UN Office for Project Services (UNOPS) climate conference organized at the Hyatt Regency earlier this week. An irrigation rehabilitation and modernization program constitutes part of the policy, and looks to boost food production through irrigation and solar-powered farming in lowland areas.

Hizkyas Dufera (Eng.), a senior advisor at the Ministry, says the list of projects to be privatized has not been finalized. He foresees privatization in irrigation will mean farmers will no longer have to wait for a government project to water their crops.

“Farming is a business everywhere else in the world. People are benefiting off of producing a specific type of cash crop,” he said. “What we want to do here is to set up a project finance structure where the private sector comes in, brings in equity, brings in credit, and implements the system.”

Hizkyas is hopeful the Ministry, along with the Agriculture and Water ministries, will complete a policy that will place irrigation at the heart of the country’s food security ambitions in the coming months. However, he recognizes the liberalization of food production is a complex task.

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“Our mandate is irrigation, so we are currently focusing on that. However, farming is a counterpart so we are working on a policy that can benefit all sectors,” he said.

Hizkyas disclosed the Ministry has yet to select the irrigation projects to be put up for privatization, nor has it identified which parts of the country would be open to private investors willing to work on irrigation infrastructure.

“Most of the complexity emanates from the land policy. We are working on ways to navigate the land ownership proclamations and regulations,” he told The Reporter.

Hizkyas observes that land ownership being in the hands of the regional governments is the complex issue that is now pushing the ministry to focus on infrastructure, and refurbishing existing irrigation schemes.

The Ministry’s water efficient and solar-powered irrigation designs include a focus on five high-yield crops – avocado, mango, banana, tomato, and onion.

Hizkyas disclosed infrastructure issues have been a significant setback to projects such as the Adaa Becho scheme in Oromia, where officials had hoped irrigation would enable avocado farming on 600 hectares. Only 30 hectares is currently covered by avocado trees.

“Electricity [in Adaa Becho] is only available four hours a day because diesel costs are so high. As a result, the yield collected from each avocado tree is almost half of what it should be,” he said.

Ministry data reveals most irrigation schemes in the country are inoperational because of high diesel costs or because they are poorly designed. Its officials are planning the implementation of intercropping of legumes, fruits, grains, and cover crops to generate additional income.

Climate change threatens the country’s largely rain-dependent agriculture, and food security remains out of reach despite the availability of viable farmland in Ethiopia. Close to 10 million hectares can be irrigated cost effectively, according to Hizkyas.

“Less than 15 percent is irrigated,” he said.

The Ministry’s irrigation schemes rehabilitation project, which will potentially cover 330,000 hectares, will be co-financed by the World Bank and the European investment bank.

Hizkyas disclosed the Ministry has received verbal approval for the appraisal process for a project that could see the irrigation of up to 100,000 hectares at a cost of up to USD 600 million.

“We will begin the feasibility study soon,” he said.

He told The Reporter that the Ministry expects to commence the project in 2026, using a competitive resource allocation method to distribute the financing among irrigation scheme owners or cluster farmers.

Hizkyas said it has yet to be decided where the project will be implemented.

“In the past, it was all based on how much per region. We are not going to do that again. It will all be a market driven approach. This is because we are trying to liberalize food production as we move towards food security,” he said.

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