Green-blue water system innovations for upgrading of smallholder farming systems--a policy framework for development

Rainfed agriculture and other depletion of water by green flows have as yet an untapped potential for improving livelihoods in semi-arid areas through income and food security. A vivid evidence of this is seen in the fact that, although working full time on food production, majority of smallholder farmers are frequently affected by shortage of food or famines. At the same time enough examples exist to show that productivity of labor, water and land under rainfed farming can be doubled or even trebled through proper land management and improved agronomic inputs supported by modest investments to reduce impacts of dry spells. However, these shining examples remain small 'islands of success' across the entire semi-arid areas. Farmers have not adopted these systems due to poor ratio of benefit to costs brought about by inadequate development or complete lack of food trade among the rural areas. This paper argues that there is a need for policy, strategic and programmatic frameworks which facilitate integrated management of land, water and markets. For this kind of strategy to work, a local market for food should be ensured to absorb at competitive prices the surplus produced by farmers in years of good rains. This will promote wealth creation and asset building among the poor in semi-arid areas. A food-exchange "futures" mechanism based on the principle of virtual water trade is proposed as a basis for achieving this objective.