$115 million support for improved watershed management in Indian states of Karnataka, Odisha

WASHINGTON– The World Bank’s Board of Executive Directors has approved a $115 million loan to help national and state institutions adopt improved watershed management practices to increase farmers’ resilience to climate change and promote higher productivity.

Agriculture is the primary source of livelihood for 58 percent of rural households in India. The sector, already facing challenges of land degradation, soil erosion, water scarcity, climatic uncertainties and low productivity, is also extremely vulnerable to climate change shocks. An increase in average temperature can affect crop yields, changes in seasonal precipitation can shift planting seasons and trigger pest outbreaks, and more-frequent extreme weather events (such as floods and droughts) can lead to food shortages. Further, livelihoods of vulnerable communities are likely to be disproportionately affected by COVID-19.

The Government of India has committed to restoring 26 million hectares of degraded land by 2030 and doubling farmers’ income by 2023. Effective watershed management can help provide livelihood security in rainfed areas, while building a more resilient food system.

The Rejuvenating Watersheds for Agricultural Resilience Through Innovative Development Project will help introduce modern watershed practices in the Department of Land Resources in the Ministry of Rural Development and in the select states of Karnataka and Odisha.

“The COVID-19 pandemic accentuated the need for sustainable and risk-averse agriculture in India which both protects farmers from climate uncertainties and strengthens their livelihood. While a robust institutional architecture for watershed development already exists in India, renewed focus on science-based, data-driven approaches implemented through this project can offer new opportunities for farmers in the face of climate change,” said Junaid Ahmad, the World Bank’s Country Director in India. “The project will help the Government of India to continue to ensure food security for the nation and for the states of Karnataka and Odisha, in particular, to build their resilience to climate change.”

India’s key watershed program, the Watershed Development Component of the national Pradhan Mantri Krishi Sinchayee Yojana (WDC-PMKSY), has made significant progress, benefitting 2.7 million farmers. The government’s new national watershed guidelines address a number of key issues including nutritional security, welfare of the watershed community, and economic gains for farmers. The project will contribute to the government’s aim of increasing income-generating opportunities for farmers, helping to improve efficiency in the use of water and land resources in agriculture.

“India has one of the largest watershed management programs in the world. The Bank has been supporting India’s successful adoption of new innovative approaches and technologies over the past two decades,” said Priti Kumar, Grant Milne and Satya Priya, World Bank task team leaders for the project. “The REWARD project will further advance this progress by developing and applying comprehensive spatial data and technologies, decision support tools, and knowledge exchanges. Lessons learned will be shared across states and other countries to transfer and scale up good practices.”

The International Bank for Reconstruction and Development (IBRD) financing will support Karnataka with $60 million, Odisha with $49 million, and the remaining $6 million will be for the central government’s Department of Land Resources. This will be a subset of the new Watershed Development Component of the national Pradhan Mantri Krishi Sinchayee Yojana (WDC-PMKSY) program, which has a budget of $1.68 billion.

In the two states, the project will support the adoption and scale up of several new approaches to implement community-led, science-based watershed sub-projects, while the Center, through the Department of Land Resources and the National Rainfed Area Authority, will distil lessons, refine national technical standards and institute a process to mainstream such approaches in national programs.

The $115 million loan from the International Bank for Reconstruction and Development, has a maturity of 15 years, including a grace period of 4.5 years