Recently the debate on subsidies for shallow tubewells has heated up with a number of articles appearing in the Kathmandu Post and other dailies. CGISP employs a number of indirect subsidies aimed at encouraging the participation of poor and marginal farmers, as well as promoting efficiency in STW utilization. Such indirect subsidies, like social mobilization services, low interest rates, technical support, extension services, training, and even collateral-free group loans are working to motivate poor farmers to take up STW irrigation. Still, some policy makers believe the way to increase STWs rapidly is to offer more attractive capital-cost (cash upfront) subsidies. Certainly, programs in the past that provided free pumps or 60-85% subsidies brought crowds of farmers foward. But surveys have shown that these farmers were neither poor, nor did they irrigate land efficiently (having got their STW at a very reduced cost). Many farmers were turned away when the subsidy money ran out. CGISP is designed to avoid such pitfalls. However, it takes more time to work.
After the government announced the removal of tubewell subsidies in July 2000, the Project had only five months of drilling season (when farmers are attentive towards purchasing a shallow tubewell) before news appeared that government again intended to reintroduce subsidies. These announcements have added confusion to the CGISP social mobilization work and several groups have dropped out with hopes that they may have a chance at a big subsidy or maybe a free pump. CGISP's approach is geared at the poor who never managed to reach the front of the line during the days of subsidy handouts. Let's hope CGISP can have two or three years to function in a subsidy-free environment to allow poor farmers their turn. Within that time the need for subsidizing a viable enterprise such as shallow tubewells in the Terai should be abundantly clear.