ILIMS RFA Frequently Asked Questions (FAQ)

Background

The Feed the Future Innovation Lab for Irrigation & Mechanization Systems (ILIMS) is a cooperative agreement sponsored by the US Agency for International Development (USAID) and led by the Robert B. Daugherty Water for Food Global Institute (DWFI) at the University of Nebraska (2023-2028). ILIMS aims to generate research-based evidence to support the growth of vibrant irrigation and mechanization markets, develop strong institutions and local capacity for sustainability, and foster opportunities for equitable access, especially for poor and women smallholder farmers. Through research for development, we contribute to the U.S Government Global Food Security Strategy (GFSS), responding to the needs of smallholder farmers amid the complexities of a changing climate and agricultural, market, food, water and energy, and social systems, in Feed the Future countries (see Section 3).

Accelerated mechanization, including irrigation, can improve agricultural productivity and profitability, if scaled with a systems approach that minimizes risks to sustainability. Farm mechanization and services provide economic opportunities with potential for increased household income, land productivity, and food and nutritional security, as well as improved resilience to climate change and other shocks. The potential for expanded mechanized production, including irrigation, is high. Large areas remain where smallholder farmers can benefit from increased access to equipment and services. Moreover, within the landscape, improved approaches to agricultural water management and water resource governance are also needed to enhance resilience. The potential contribution to the GFSS can only be realized through fostering suitable conditions and applying technological advancements or other innovations within agricultural fields and landscapes and market systems.

ILIMS supports applied research that engages stakeholders at multiple levels and can generate evidence for stronger policies, investments, and practices. Through a competitive process, the University of Nebraska plans to identify a portfolio of sub-awards to conduct research focused on scaling suitable irrigation and mechanization services (on-farm to farm-gate), agricultural water management approaches, and governance and capacity strengthening.

Funding Opportunity

This section describes the expected process and timeline for this RFA.

This Request for Applications is to identify sub-award research partnerships that can contribute to the ILIMS objectives and GFSS goals. The proposed projects are anticipated to begin in March 2025 and to end on or before 31 March 2028. Proposal project budgets should not be less than $150,000 and not exceed $800,000. The number of awards will be determined based on funding available and quality of proposals.

Full application submissions are due 31 October 2024 at 16:00 Central Daylight-Saving Time/UTC -5. Evaluation criteria are set forth in Section 6.

The review process will be conducted in two stages:

1. Full application review.
2. Short-listed application review. ILIMS aims to inform short-listed applicants on or before 25 November 2024. Short-listed applicants will be asked to provide additional details, which may include information on: project budget, monitoring, evaluation and learning plans, impact pathways, partner commitments, and other information relevant to a final selection of successful applications. In addition, short-listed applicants may be asked to participate in a meeting to present the project proposal and discuss various aspects of the implementation plan. Negotiation with successful applicants and award contracting is expected to begin in December 2024. Project implementation is expected to begin in March 2025, with exact timing to be determined based on the completion of negotiation and full execution of awards.

Eligibility 

This section describes the eligibility requirements and preferences, as well as the activities that are not eligible for funding under this RFA. 

 Targeted geographic areas

Applicants must target activities in at least one of the following geographic areas:

• Priority countries: Ethiopia, Rwanda, Ghana, Nepal, Guatemala, Honduras, Zambia, Malawi.
• Other Feed the Future countries will be considered.

Eligible applicants

• For-profit business with regional/national presence and legal registration in the proposed country. Private sector applicants must demonstrate experience working in frontier and developing markets relevant to application. 
• Organizations such as research institutions, universities and educational institutions, commercial businesses, registered farmer cooperatives, consulting firms, non-profit and non-governmental organizations, and/or business/member associations. 
• Applicants with relevant experience and qualifications to implement the proposed scope of work and to efficiently manage project tasks.
• At least one partner must be located and legally authorized to work in the target country.

Additional eligibility criteria

• Consortia and partnerships are encouraged. Consortia are encouraged to include a private sector partner. Consortia may propose a single lead or a co-lead arrangement.
• At least one consortium partner must be based in the targeted country. 
• Applicants may submit more than one proposal as lead and/or as a consortium partner. 
• Applicants may include one or more countries in a single proposal.
• Lead or co-lead applicants must have a presence, experience and / or eligibility to operate legally in the region and/or country.[NOTE THIS REQUIREMENT WAS EDITED ON 12 AUGUST]
• Applicant businesses should have at least one year of experience and existing commercial viability in proposed technical areas and in the region and/or country.
• Preference will be given to proposals that leverage funds and/or cost share; this must be measurable and contribute demonstrably to the achievement of desired results (e.g., financial contributions, unrecovered indirect costs, third party contributions, donated services, and contribution of various types of property).

Not eligible for funding:

• Pure, upstream, theoretical only academic research (i.e. research and research outputs that do not aim to contribute in practical way to improvement of irrigation and mechanization systems in target countries will not be considered).
• Design of new equipment and machinery.
• Equipment procurement and/or construction; proposals that seek to only import/distribute equipment will not be considered.
• Agricultural commodity procurement.
• Restricted commodities and services from ineligible suppliers in accordance with 22CFR228.12. (https://www.gpo.gov/fdsys/pkg/CFR-2012-title22-vol1/pdf/CFR-2012-title22-vol1-part228.pdf)

Scope of Work for Research

This section describes the expected scope to be considered and outlined in the technical proposal for this RFA.

ILIMS aims to ensure integrated systems thinking and to elevate cross-cutting issues across the portfolio. Applicants are required to demonstrate a systems approach to the topic, intentionality to integrate cross-cutting issues, approach to measurable impact, and potential to contribute to one or more of the ILIMS objectives. ILIMS recognizes that numerous technologies have been developed in irrigated and mechanized agriculture, as well as rainfed systems, but no single technology can address the complex, multiple challenges in agri-food systems. Increasingly, there is a recognition that technology development needs to consider specific geographic and socio-economic contexts and then, adapt to or integrate measures to influence the institutions, policies, social practices and economic systems. In other words, an innovation is a set of appropriate pieces that combine to meet the needs and conditions of a specific situation. To be fit-for-purpose, the design of interventions will also consider potential trade-offs over time; some contemporary projects refer to this as socio-technical bundling. The ILIMS research portfolio will reflect this approach to contribute to five inter-related objectives:

Objective 1: Context-suitable socio-economic, institutional, and technological interventions that effectively target and reduce risks for multiple producer types.

Objective 2: Strengthened, inclusive natural resource governance and improved climate adaptation, mitigation, and resilience capacities.

Objective 3: Strengthened and inclusive market and finance ecosystems for irrigation and mechanized technology systems with reduced inequalities in access to mechanization and irrigation technologies and services.

Objective 4: Strengthened stakeholder capacity throughout the market system to manage trade-offs and sustain natural resources.

Objective 5: Improved health, equity, and nutrition security through protected water and diets in mechanization and irrigation interventions.

The scope of this RFA covers the five categories listed below. Specific information for each category is provided in the corresponding Annex, as indicated. Applicants will be asked to indicate which category their proposal seeks to address; applicants may choose but are not required to indicate multiple categories, as relevant to their proposal. Institutions and organizations may submit multiple proposals and/or join multiple consortia across categories and geographies.

RFA Categories:

1. Irrigation service provision (Annex 1)
2. Mechanization service provision (Annex 2)
3. Agricultural water management in the landscape (Annex 3)
4. Innovative finance and agricultural water management (Annex 4)
5. Capacity needs and approaches to strengthen (Annex 5)

Application Requirements

This section describes the requirements for a complete proposal to be considered under this RFA. 

Applications must be submitted through the on-line portal by 31 October 2024, 16:00 Central Daylight-Saving Time/UTC -5. The online portal in Piestar will guide you through the process and will tell you what information to submit. Applicants should note the information provided here is to enable applicants to prepare information to complete all components in the application portal to qualify for funding. The components required include the following:

Applicant information

Organizational information of the applicant and the application will be entered in the online portal as prompted. Applicants must ensure all fields are completed and accurate before submitting. This list provides the information that applicants will need to provide for the application form in Piestar.

Technical proposal 

Applicants must follow the provided outline below for funding consideration. The technical proposal may be no more than 10 pages with a minimum of 12 size font. Any pages or materials beyond the 10 pages will not be considered in the review process. The technical proposal must include the information as indicated, organized in the following sections:

Budget

Applicants are required to submit a summary budget for the proposed activity using the budget template; other formats will not be considered. The budget must be in US dollars; each application should not exceed $800,000 and not be less than $150,000.

Applicants are encouraged to include cost-share and/or leveraged funds in the budget as an indication of the applicant’s commitment to the proposed activity. 

Note that the budget for the full proposal application is a summary. Applicants who are short-listed to move to a second review will be asked to provide a detailed budget with sufficient information to determine the reasonableness, allowability, and allocability of costs. It is important to note that applicants will not be allowed to change the total budget request; no significant changes will be allowed across the budget amounts from the summary budget.

Applicants should note the following when completing the proposal budget:

• Short-listed applicants will provide a detailed budget for the project duration. Applicants should plan accordingly, as the total budget amount may not be changed. 
• Indirect or overhead rates can be included, but if moving to second review and negotiation, the applicant must provide supporting financial records and meet federal limitations and requirements as specified in 2 CFR 200.414. https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-E/subject-group-ECFRd93f2a98b1f6455/section-200.414
• The following are NOT eligible for funding and should not be included in the budget proposal: a) goods from Office of Foreign Assets Control (OFAC) restricted person or country; b) equipment procurement for the purpose of wholesale import and retail distribution; c) agricultural commodity procurement.

Evaluation: Process and criteria

This section describes the planned process and criteria for review and evaluation of proposals.

An evaluation committee (composed of ILIMS management entity, University of Nebraska staff/faculty, and external experts) will review and rate proposals in accordance with the evaluation criteria described below. The project reserves the right to prioritize which applicants receive funding or to not fund any of the applicants.

Innovation and technical merit

Proposals will be evaluated based on strength of the content and potential for contribution to new knowledge and new practices and approaches that hold likelihood to strengthen policies, practices, technologies and approaches in target geographies. Notably, proposals should contribute to a better understanding of and solutions for climate adaptation, climate mitigation, and other livelihood strategies for smallholder farmers and other agri-food system actors.

Implementation plan viability

Proposals will be evaluated on the feasibility to implement the project and complete the proposed product(s) or service(s) on time. Reviews will consider if proposals have sufficiently recognized key risks and mitigating measures that may be taken. These risks may include but not be limited to: organizational structures/process, social context, market system, institutional and/or political conditions, economic conditions, business operating context, and maturity of partnerships.

Likelihood to contribute to development impact

Proposals will be evaluated based on relevance of the research to contribute to equitable, sustainable scaling of and benefit from irrigation and mechanization services in target geographies. Applicants should demonstrate an awareness of and response to stated needs of USAID target groups (e.g., poor farmers, bottom of the pyramid market segments, women, marginalized or minoritized groups, youth), and include an explicit strategy or approach to enable benefit for women, youth and/or marginalized or minoritized producers or other value chain actors within the system. Application evaluation will consider the proposed learning activities and knowledge sharing mechanisms to enhance outcomes from research for target geographies and groups. In addition, applications are expected to complement and support the U.S Government Global Food Security Strategy (GFSS).

Partnerships

Proposals will be evaluated based on the proposed partnerships and the value of the partnerships for contributing to impacts (e.g., ILIMS objectives, SDGs, GFSS goals, national or regional goals, and/or others high level aims). A priority is ensuring strong participation and leadership of at least one local partner; applicants should demonstrate an intentional approach to localization or inclusivity with priority given to activities that integrate and/or elevate a local partner(s). An additional priority is participation of a private partner (company, entrepreneur, producer group) that is registered and operating in the targeted region or country and has a significant contribution to make to potential project outputs and outcomes.

Budget reasonableness

Proposed budgets will be evaluated based on best value. Notably, the budget will be measured as: 1) the application demonstrates that resources will be applied in a way that will enable timely, effective achievement of proposed outputs, 2) the application demonstrates cost realism as the most probable cost of performance for the proposed technical and management approach.

Instructions for Submission

All components (applicant information, technical proposal and budget) must be submitted in the online application portal: https://irrig-mech.piestar-rfx.com/rfps 

Deadline for application submission is 31 October 2024 (Thursday) at 16:00 Eastern Standard/UTC -5. Receipt of submitted application will be confirmed through an automated email.

Applicants may submit questions to support@piestar.com  until 6 September 2024. Responses will be posted no later than 16 September 2024 at the Piestar RFX link.

Notification of short-listed applicants is expected on or before 25 November 2024. The final review will be after short-listed applicants provide all requested information.

Negotiation for awards is expected to begin in December 2024. Project implementation is expected to begin in March 2025, with exact timing to be determined based on the completion of negotiation and full execution of award.

The following will not be considered for review:

• Proposals submitted by email, unless pre-arranged in cases of weak internet. 
• Proposals submitted after the deadline.
• Proposals delivered in hard copy form.
• Documents that are locked, require passwords, etc.
• Zip files, other executable files, and files that are larger than 5 MB.

All submitted information and documents related to this request for applications shall be in English and all costs shall be expressed in US dollars. 

Annex 1: Irrigation Service Provision

ILIMS takes a systems approach to account for the complexities of suitable irrigated farming. The demand for irrigation systems and services is expected to continue to increase with rising demand for food, weather variability and increasing rural labor costs, scarcity and burdens. Farmers are utilizing a broad range of irrigation options, such as irrigation services, pump rentals, equipment leases, pay-to-own, direct ownership, and various combinations. Demand varies across different farmer groups and farming systems. Suitable combinations of socio-economic and technological inputs (i.e., ‘socio-technical bundles’ or composites of options) are needed that effectively reach and benefit poor smallholder farmers, women farmers, youth, and other marginalized groups.

ILIMS aims to better understand existing and emerging approaches to expand irrigation access through irrigation service provision. We seek to identify the potential suitability and sustainability of irrigation service provision, particularly provided by private sector entities through the market system, in various contexts and for different farmer clients. Irrigation service provision has not been sufficiently studied in Feed the Future target countries. Knowledge gaps remain around existing irrigation services, such as farmer demand, level of irrigation service supply, cost-benefits at farm level, household benefits, among other issues. ILIMS therefore intends to support research on irrigation service provision suitability and scalability that can complement the available research evidence. 

In addition to the knowledge gaps on demand and at the farm or household scale, we also recognize a lack of information about the supply of irrigation services. Farmers, entrepreneurs and companies are investing in and expanding their operations to meet the demand for an increasingly wide range of irrigation products and services. Successful, profitable, and inclusive scaling through market systems for irrigation services requires a large range of institutions and partnerships. ILIMS intends to support research that provides insight into the range of business models for irrigation service provision, to understand what business models are most suitable in what biophysical and socio-economic conditions, what constraints irrigation service providers face to expand, and what types of investment or finance are needed. 

A better understanding is needed of both the demand and supply side constraints – and opportunities or interventions that can reduce constraints. Public interventions, private investments, marketing strategies, specialized business models, client acquisition approaches for poor farmers, finance instruments for farmers and service suppliers, can all be strengthened to be fit-for-purpose.

Currently, irrigation investments are increasing in the Global South, but these are largely led by and benefiting individuals and companies that are already better off, especially higher income, advantaged groups. Many agricultural input supply companies that are expanding in ‘frontier’ markets in Feed the Future countries omit women from strategies as they target high income farmers. Therefore, investments and approaches are needed to ensure access for poorer farmers and women farmers without increasing the risks to their livelihoods or resilience, especially amid climate change and in fragile ecosystems. While it may be assumed that irrigation services are more accessible to women farmers than irrigation equipment purchase, there may be factors – whether intra-household, community or other socio-economic issues – that restrict women from such services. Research is needed to identify the factors that lead to exclusion of poorer women and youth from access to the benefits of irrigated agriculture and to begin to identify approaches that can mitigate further marginalization.

The issues outlined here are not exhaustive; knowledge gaps remain in understanding suitable, sustainable approaches to expand access to irrigation for smallholder farmers. We provide below indicative research questions, but also recognize that information priorities and knowledge gaps are often highly contextual.

• Under what contextual conditions can irrigation service provision best contribute to agricultural productivity, profitability, and/or improved livelihoods? 
• What social, economic, market, production, or other conditions hinder equitable access to and/or benefit from irrigation services in target geographies and for target groups and people? What social and technological innovations, such as bundles or composites of interventions, can accelerate access for poor and marginalized farmers without increasing their risks?
• What irrigation service business model(s) are profitable and hold potential for sustained operation? What irrigation service business model or combination of irrigation service providers and other types of businesses are best suited to reach particular areas or groups? What constraints do service providers face and what types of approaches can reduce constraints to improve market viability?
• What market system approaches or interventions, such as types of business models, finance instruments, partnership models, institutions or policies, among others, can strengthen the viability of irrigation service provision?
• What are the roles of various actors in the market ecosystem (including public agencies, private sector, finance, community or farmer-based organizations, research) and what types of support or interventions might strengthen roles for market-based supply of irrigation services? What conditions might be most suitable for market-based, public-sector based, or combined initiatives to expand irrigation service provision?

Annex 2: Mechanization service provision

Numerous initiatives have been implemented over the past few decades to increase mechanized agricultural production in low- and medium-income countries. Various approaches have been used through both the public and private sector to consolidate services, provide services and equipment on credit, and generally strengthen the supply of various machines for production, harvest, and post-harvest. Despite the anticipated benefit of mechanization to increase production and lower costs, the numerous constraints in the farm mechanization system limit smallholder farmers from access to equipment and tools. The mixed results of investments in agricultural machinery and mechanization highlight significant knowledge gaps, which warrant further study.

ILIMS aims to support research to understand the varying conditions and outcomes related to mechanization investments; our focus is on-farm production and harvest or threshing at the farmgate. Existing evidence suggests mixed results in terms of productivity, farm profitability, and farmer livelihoods, while others point to projects that may worsen household or farm debt levels. Several projects and research in South Asia, Sub-Saharan Africa and Latin America show that smallholders are best able to afford mechanization through machine hiring or mechanization service providers, rather than investing directly in equipment. While some farmers may eventually invest in their own equipment, many continue to utilize either public or private service providers. Some promote aggregation of services and inputs to enable farmers to access multiple agricultural inputs from single sources, such as mechanized services, agrichemicals, agronomic advice, and credit. However, in some contexts, mechanization service costs can account for a large part of total production costs for smallholder farmers and increased farm costs for mechanization do not necessarily increase the area under production. This suggests knowledge gaps on smallholder access to mechanized production, as well as on smallholder benefits and risks related to mechanization.

Historically, many initiatives and programs sought to only push technology, particularly imported machinery that has lacked a developed distribution and post-sales service network. Smallholders, entrepreneurs and equipment suppliers and servicers may all benefit in a functioning mechanization service and agricultural equipment market. Factors such as policies, financial regulations and energy costs may keep equipment prices above the reach of entrepreneurs who could offer mechanized farm services. The lack of capacity in the market system also shortens the equipment lifecycle, which in turn causes faster depreciation and need for replacement. At the same time, it is unclear that efforts to reduce barriers to market entry, such as tariff removal, equipment subsidies, and smallholder credit for agricultural equipment have contributed to medium- to long-term market growth and resilience. Moreover, the viability of various public and private business models for service provision, particularly under different conditions, is not well understood. These knowledge gaps point to the need for more in-depth, targeted research on mechanization and particularly, mechanization service provision business and investment models within the market system.

Generally, recent research, albeit limited, points to significant knowledge gaps in suitable pathways to sustainable adoption of mechanization, such as context-specific economic conditions, agro-climatic conditions, and critical social factors. Some initiatives have sought to provide employment and entrepreneurship openings for women and youth through mechanization services, but research has shown that stakeholders in Sub-Saharan Africa do not necessarily agree with assumptions about youth, mechanization and digitalization. At the same time, very little research has been done to understand the gendered nuances of operating a business for mechanized services. Equally concerning, very little is known about the contextual factors that hinder or enable women to access and to benefit from on-farm and production-related mechanized services. 

ILIMS seeks to support research that can generate more evidence to design technical, social, economic, and institutional approaches; and direct investments that are viable within the intersecting social, market, and agri-food systems. Notably, we do not intend to fund research on development of new equipment or artificially push machinery that is not suitable to context. The knowledge gaps suggested here are indicative and not exhaustive, particularly when considering context-specific conditions. We provide some overarching research questions but recognize other questions may be relevant in a particular country context.

• Under what conditions can mechanization service provision best contribute to agricultural productivity, profitability, and/or improved livelihoods in the target geographies? 
• What social, economic, market, production, etc. conditions hinder equitable access to and/or benefit from irrigation and mechanization services in the target geographies?
• What socio-technical innovation bundles can accelerate access to mechanization for poor and marginalized farmers without increasing their risks (e.g. increased household or individual debt, natural resource degradation, or other risks)?
• What market system approaches, including types of business models, client acquisition approaches, finance and credit, can strengthen the inclusivity of mechanization systems for poor, youth, women? 
• What are the roles of various actors in the market ecosystem (including public agencies, private sector, finance, community or farmer organizations, research)?
• Are youth and women interested in playing roles in mechanization and irrigation market systems? If so, how do we catalyze their involvement? 

Annex 3: Agricultural water management in the landscape

Across much of the Global South, smallholder farmers operate in systems that are transitioning from fully rainfed to supplemental and full irrigation as farmers adapt to climate changes and aim to meet increased demand for agricultural produce. Expanded access to water for irrigation in the Global South is essential for economic growth, food and nutritional security, and climate resilience. Yet increased water use can lead to water scarcity and water quality degradation and undermine progress. Incremental improvements in approaches and techniques can have disproportionately large consequences and benefits.

Agricultural water management (AWM) includes consideration of multiple users and uses of water in the landscape, including environmental flows. Other users of water in a catchment might include industries, domestic users, other agricultural initiatives, or power generation. On-farm incomes and livelihoods are undermined if environmental goods and services are harmed. On the other hand, successful AWM that supports the sustainable intensification of farmland and higher productivity per unit of water consumed can enhance catchment functioning. AWM is also fundamentally influenced by the changing climate, but also a cornerstone of climate resilient and sustainable agriculture.

Improving AWM will occur at the system level; many interlinked facets influence each other in sometimes complex and non-linear ways. The management of both water quantity and water quality are equally important and closely linked. AWM takes place at a variety of scales, from the farm field to the catchment and beyond, and includes rainfall, surface water, soil water, and groundwater. AWM also applies across multiple timescales, from a single rainfall event to episodic recharge of some aquifers which may only take place once a decade or longer. Scaling improved approaches will consider all stakeholders, institutions, and environmental characteristics. Durable and workable local solutions to the challenges of AWM, with benefits that accrue to most or all stakeholders, will be sensitive to local context as well align with catchment and wider considerations. Improved AWM must take the local physical and institutional conditions into account, since all users and catchments have unique characteristics. AWM also takes place in the context of existing socio-economic, financial, environmental, and institutional conditions, and it must be compatible with these, in keeping with the principles of integrated water resource management. 

Historically marginalized groups, particularly women and youth, have often been neglected in AWM initiatives and their experience and expertise neglected. Given the significant roles of women in water and agriculture, gender relations are therefore fundamental to understanding the suitability and feasibility of improved AWM.

As AWM changes and becomes more intentional and planned, practices should increasingly be quantifiable and measurable. This will enable greater access to data and analysis that can be used to continue to improve practices. Indicators might include biophysical and economic metrics as well as social, gender, equity, and institutional characteristics. 

Although AWM is fundamentally a local problem in which sustainable solutions are local solutions, common research questions emerge. There is a need for improved technologies and socio-economic packages, conceptual frameworks, management systems, and financial products, as well as better targeting and tailoring. The key issues outlined here are indicative, particularly when considering context-specific conditions. We provide some overarching research questions but recognize other questions may be relevant in a particular country context.

• What solutions for AWM that retain water and nutrients, and build soil health, are most promising, what obstacles prevent wider roll-out, and what practical actions can be taken to support scaling in both rainfed and irrigated areas? 
• Where irrigation is feasible, what irrigation solutions meet local needs and integrate with local institutions while staying within environmental limitations? 
• What bundles of techniques and approaches are most practical for understanding, preserving, and improving catchment water quality, and avoiding siltation, agrochemical over-use, salinization, microbiological contamination, etc.?
• What mechanization systems or technologies appear to be most useful in promoting or enhancing AWM? How can these be embedded in value chains or business models? 
• Within the local institutional context, what are the current AWM practices favored by small farmers, how effective are these, and what is preventing wider adoption and roll-out? 
• How do local and national policy and institutional settings enhance or diminish AWM at the farm and catchment scale? What trade-offs, compromises, and conflicts appear to exist? Are there policy level changes that could enhance significant improvements in on-farm or catchment level AWM? 
• How can AWM be better quantified? How can the “gap” between available spatial data in bandwidth-heavy or complex formats, and the needs of local farmers, be bridged? 

Annex 4: Innovative finance related to agricultural water management, irrigation and/or mechanization  

Finance is central to increasing investments in irrigation and mechanization. However, the credit available is nearly always insufficient and credit products not suitable to smallholder farmers. In addition to supply, recent evidence suggests a nuanced and complex set of constraints from both supply and demand sides. For example, not all farmers want credit for irrigation or agricultural equipment, even if they can access loans. Farmers, whether individual smallholders, groups or cooperatives, are diverse; farmers have varying levels of risk aversion and different – often very specific - types of credit needs.

Recent innovations in climate finance are enabling equipment supply companies to access various types of climate finance. While fixing supply from financial institutions and equipment supply companies will not necessarily address all the issues, some of these methods offer potential for reducing the costs of equipment and thereby some of the demand side constraints. However, these options in the credit carbon market are relatively new. It is unclear if the tools are more effective than other approaches in benefiting smallholder farmers, such as tariff reforms, various types of insurance, or equipment subsidies, or various other instruments. 

Moreover, women farmers face additional challenges to accessing suitable credit, compared with men. Women are often at a disadvantage in access to information, sufficient assets, or a documented financial history in their name. Women may be perceived to credit providers as risky and not credit-worthy when standard criteria are used. Even with an increase in the number of village savings and loans associations, women still cannot access the amounts of credit that would be needed to invest in equipment.  Furthermore, women are often even more risk averse than men in the agriculture sector, which affects credit demand.

Another emerging climate finance option is more targeted toward rainfed farmers and considers water and land management at the landscape or watershed scale. Whether termed green water credits or payment for environmental services, climate funds and carbon credit schemes are beginning to pay attention to compensating smallholder farmers for good practices that sustain healthy environments, for example, reducing run-off and erosion to the benefit of downstream users. Again, as relatively new innovations, particularly related to climate funds and carbon credits, the suitability, sustainability, and equitability are not well-documented or analyzed.

The knowledge gaps suggested here are indicative and not exhaustive, particularly when considering specific, contextual conditions. We recognize other gaps or questions may be relevant in a particular country context. 

• What financial tools and strategies are needed to provide capital and risk management innovations to enable expansion of access to irrigation, mechanization and improved agricultural water management, including in rainfed systems, more broadly?
• How inclusive are financial mechanisms? Can financial instruments be targeted and be adapted to be more inclusive of women and marginalized groups? 
• How robust are the underlying methodologies? How can methods be improved to support a robust and equitable deployment of climate and other finance instruments? 

Annex 5: Capacity needs and capacity strengthening approaches

There is broad consensus that strengthened local capacity at all levels of irrigation and mechanization systems is essential for local leadership and sustainability. Recent engagements have highlighted major capacity gaps as systems transition from rainfed to irrigated, from manual labor to mechanization, all amid unpredictable weather patterns due to climate change. In addition, there are gaps in context-specific innovation bundling and scaling, equipment repair and maintenance training for personnel, capacity for natural resource governance, and capacity for cross-sectoral innovation. However, short-term training investments have not had the expected impact and capacity remains low. ILIMS aims to support research that will contribute to more effective human resource capacity development for stronger mechanization and irrigation systems.

Currently, capacity pinch points are blocking the scaling of irrigation and mechanization equipment and practices, particularly for market-based scaling. Private companies struggle to find a skilled workforce for sales and distribution, service provision, and repair and maintenance. The challenge of ‘spares and repairs’ increases risks and costs for companies, public agencies, and farmers. Irrigation equipment suppliers are searching for local staff who can conduct water assessments and support good water stewardship. Irrigation and mechanized service provision by inexperienced and untrained operators are causing high breakdown rates and short equipment lifecycles. Scaling technologies requires farmer and farm-level capacity and information access, creating a strong market system for irrigation and mechanization requires capacity in fabrication, manufacturing, maintenance and repair services, and irrigation and mechanized service provision. Moreover, training in business and finance is not adequately preparing youth for career opportunities that form a critical foundation for agricultural-based economic growth. ILIMS seeks to strengthen capacity in the business ecosystem for scaling different modalities, e.g., capacities ranging from specialized irrigation and agricultural equipment finance, business model development, information technology, and technical skills for specific equipment.

At the same time, there is a call for capabilities to prepare for climate change impacts and extreme weather. While public sector agencies (e.g., water bureaus and National Agriculture Research and Extension Services (NARES)) recognize the growing importance of planning based on suitability, as well as monitoring water quality and availability, they often lack the institutional and individual capabilities to set guidelines, collect data, conduct monitoring, or educate the public and industry on regulations. For example, irrigation equipment suppliers provide digital sensors and collect large data sets on water, but NARES and dysfunctional hydromet networks lack the capacity to use the data. ILIMS will consider supporting efforts to engage with public institutions to build local capacity that can coordinate efforts on natural and water resource management across scales, including with communities and particularly with industry. ILIMS recognizes that such efforts will require research to gain a better understanding of both the capacity gaps and needs, as well as the types of partnerships that are needed; short-term training will not be sufficient. 

Historically, the research, public, and private sectors have operated separately, often at cross-purposes in the Global South. Tertiary education institutions largely remain disconnected from private industry. Curricula are not oriented to training a suitable, current workforce for industry or governance as agriculture intensifies and climate change impacts compound. While skills are still needed in infrastructure design, much of the irrigation industry requires new skills that align with new directions and approaches to irrigation investment and expansion. The lack of innovation and innovative partnerships in the sector cascades down to Technical, Vocational, and Educational Training (TVET). In some cases, private companies and service suppliers are bypassing formal education institutions to set up their own schools and programs. In other cases, companies are working with TVET and universities to set up targeted training and certification programs tailored to their needs. 

Undeniably, the human resource pipeline is out of step with contemporary needs. Despite significant public and development partner funding for short-term training, capacity gaps persist, exacerbated by a stifled innovation system. Strengthening linkages between sectors and fostering collective innovation are fundamental to overcoming capacity gaps and scaling irrigation and mechanization. These knowledge gaps – in terms of understanding the capacity needs and the best approaches to address those gaps - are indicative and not exhaustive, particularly when considering specific, continual conditions. We offer some overarching research questions but recognize that other questions may be relevant in a particular country context. While the primary focus of the call is not to fund more short-term training, such requests will be considered if they are innovative, and the need has been clearly outlined. The main purpose of this call is to identify the gaps with greater specificity and to identify the best approaches to address current and future capacity needs. 

• What capacities are needed by the private sector to expand distribution and ensure continued services to more farmers, including women and those at the bottom of the pyramid?
• What capacity and capabilities are needed in the short- to medium-term to contribute to resilient market systems in mechanized and irrigated agriculture? What are the most effective approaches to ensure continued availability of skills and capabilities? 
• What capacity strengthening approaches and methods can support sustainable human resource development to ensure readiness and resilience for climate change, extreme weather events, and unexpected crises in food systems?
• Which modalities for capacity strengthening are most suitable to enhance the roles and capabilities of relevant public institutions and private sector actors engaged in scaling irrigation and mechanized equipment and services?