Dear Friends,
Welcome to the second podcast episode from a brand new podcast season of Agribusiness Matters.
Irrigation (and more broadly managing water) is a complex subject that carries paradoxes effortlessly in its sleeve.
Flood Irrigation goes back all the way to the Bible and yet, today accounts for 95% of the world’s irrigation. 1
Although economists love to point out that irrigation tech is a good way to build resillience in farming (instead of depending on the vagaries of monsoon), when you look at states with high net irrigation rates in India, it has been serviced through ground water.
As much as it is impossible to separate soil from water, when you look at the current irrigation tech trends in context with agritech, biological players are moving towards irrigation tech to offer fertigation as a service and irrigation tech players are moving towards biologicals conversely.
Globally, and more so in small holding contexts, irrigation tech is moving towards Irrigation-as-a-Service model. How do we now understand the potential of Irrigation-as-a-Service, at a time when we have unseasonal rains (wet April) and India is forecasted to run out of groundwater by 2025?
Few weeks back, Ankit Chandra and Nick Brozovic from Daugherty Water for Food Global Institute released couple of insightful reports on India’s agricultural water ecosystem (Part 1 and Part 2) and I invited them to Agribusiness Matters podcast last week.
Talking about irrigation tech with Nick and Ankit was like opening the hive mind of global irrigation tech. This was an extremely insightful conversation. Nick with 25 years of rich experience in this ecosystem, has been one of the foremost water economists talking about irrigation-as-a-service in policy circles.
In this episode, we cover:
(00:00) Introduction
(02:53) Nick’s professional background in geology and how it changed the way he looked at the role of water in agriculture.
(05:45) The edge researchers bring to the ground when they come with strong entrepreneurial instincts and eagerness to get hands dirty.
(10:45) The double bind of our moral instincts to water markets and unscrupulous exploitation of ground water management. Is there way out of this double bind? How do we examine the problematic relationship between water and markets?
(15:55) The challenge of irrigation tech in India and Africa when upstream infrastructure is a public good and collectively owned.
(16:32) What could be the best elevator pitch to a make a strong case for bringing water markets to India to avoid unscrupulous exploitation of ground water? What are the underlying regulatory infrastructures needed for water markets and water trading? What are its unintended conequences?
(20:10) Informal Water Markets (Lift Irrigation Cooperatives) emerging in the absence of formal water markets. What can we learn from Informal Water Markets across the world? The History of Informal Water Markets.
(23:55) Irrigation-as-a-Service and startups leveraging community structures for Irrigation-as-a-Service. The Business Models underpinning Irrigation Tech. Why Nick Hates Pilot Schemes in Irrigation Tech.
(26:24) Tackling the Challenge of Irrigation-as-Service. Why is there neglible venture capital activity in irrigation tech? Why there haven’t been much strategic partnerships between startups and industry incumbents in smallholder irrgation tech contexts? Reducing Customer Acquisition Costs in Irrigation Tech.
(29:41) Leveraging Government Schemes to reduce customer acquisition costs in Irrigation Tech and its unintended consequences. The challenge of subsidies in killing the potential of irrigation tech and distortion of market signals
(31:42) Limitation of achieving Product Market Fit through grants. The challenge in making farmers inadvertently take downstream risks. Do farmers understand the value proposition involved in saving water and energy?
(34:47) Is there an appropriate technology for irrigation tech? How smallholding countries tend to get Irrigation Tech at 40% less cost when compared to their counterparts from US and other markets? The viability of selling software and hardware alone in irrigation. Would Irrigation-as-a-Service be the answer?
(37:11) Irrigation-as-a-Service in South East Asia. Innovations happening with a service business model component. Why technology should work for farmer instead of the current scenario where farmers tend to go one mile further to make technology work for them?
(39:00) Selective perceptions over the macro aspects (water availability) as opposed to the micro aspects (water use efficiency). Irrigation being subservient to market prices. How can we translate benefits of irrigation tech to farmers? Why bunding is happening in irrigation tech?
(41:57) Why precision agriculture is subsuming irrigation tech as a category in terms of funding? The question of exits in agritech. Innovation happening on corporate venture capital rather than traditional venture capital. John Deere’s investment in Inner plant. How agri-input companies are bundling inputs with irrigation. ChatGPT and Precision Agriculture. The role of knowledge graphs in precision agriculture.
(45:53) Why is it hard to be an integrator in agritech? Bundling irrigation tech and precision agritech. Playing a devil’s advocate for Irrigation-as-a-Service. Do margins increase in irrigation-as-a-service model?
(47:53) Why is World Bank not talking about Irrigation-as-a-Service? Why is Irrigation-as-a-Service the best case that serves both farmers and water entrepreneurs? Ground stories from Rwanda. Economies of Scale in Irrigation Pumps.
(50:45) Why Vertical Integration models will never emerge in Irrigation Tech. Fertigation Models in Agritech. John Deere selling Irrigation Tech ventures to a private equity firm in Israel
(52:20) Why global market for irrigation is small, albeit with outsized influence. Merger of Rivulis with Jain Irrigation. Consolidation in Irrigation Tech ecosystem. Providing value through services rather than equipment.
(55:00)The promise of data-driven agriculture and services model. Experiences from agritech entrepreneurs in Africa.
(56:45) Israel Fetish and the influence of Israel in the development of Irrigation Tech across the world. The role of Israel in Irrigation Tech. Focused solutions in Irrigation Tech from Israel. India and Israel relationship in agritech ecosystem. Value proposition for point solutions. What can we learn from Israel water ecosystems? Technological innovations from highly regulated water access and monitoring
(1:01:15) The Myth around water savings efficiency. The role of regional water balance in agritech ecosystem. Understanding water conservation goals and the complexity involved in enabling these goals through technologies. Tunisia’s water scarcity.
(1:04:00) The role of loss aversion in farmers’s psychology towards irrigation tech. Fluctuation in crop yields. Regulations in wet and dry years. Dynamic regulations and possibilities in managing aquifiers.
(1:08:00) Managing irrigation tech in rainfed agricultural regions. Supplemental Irrigation solutions for rainfed regions. Flash droughts on rainfed regions. Navigating the transition from rainfed irrigation to managed irrigation. Exploitation of irrigation tech in central western India.
(1:12:00) Why Irrigation exists in a continuum. Bringing markets to managing water quantity and quality. Contextual Appropriateness of Irrigation Tech.
(1:15:00) Future Predictions for Irrigation Tech in an age of Climate Change.
So, what do you think?
How happy are you with today’s edition? I would love to get your candid feedback. Your feedback will be anonymous. Two questions. 1 Minute. Thanks.🙏
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17. Smathers, R. L. (1995). Economics of surface irrigation systems /. Moscow, Idaho : University of Idaho Cooperative Extension System,.
Managing Water | Nicholas Brozović and Ankit Chandra