The government has not announced any financing scheme through commercial banks for promoting solar-run tube wells after lapse of a month which seems negligence of the policymakers which also failed to bring advancement in agriculture sector with the similar initiative last year.
Yes it is correct that a policy statement has been made by the government in the Finance Act, said Inamur Rahman, CEO Reon Energy Solutions, we are still to see exactly how this will be administered.
In the past, governments have made similar announcements but things have not followed through. We are all hoping that this time the scheme will actually be put in place to benefit the Pakistani farmer.
In the Finance Act, the government proposed to provide interest free loans for setting up new solar tube wells or replacing the existing tube wells with solar tube wells. The scheme was proposed mainly to facilitate the small growers and to reduce heavy expenditure incurred on diesel/electricity tube wells
Under this scheme it is proposed to provide interest free loans for 30,000 tube wells in the next 3 years. All farmers with landholdings up to 12.5 Acres will be eligible to apply for this loan. In case the number of applications in any one year is more than 10,000 the beneficiaries will be selected through trans- parent balloting.
After installing solar tube well, a farmer using diesel engine for five hours a day will save Rs.1660 per day and a farmer using electric pump for five hours a day will save Rs.466 per day in running costs.
It was suggested that against a deposit of Rs.100,000 the government will provide interest free loans through the commercial Banks. The interest on these loans will be picked up by the government.
It is estimated that the cost of half cusec solar tube well may be up to Rs 1.1 million. Inamur Rahman suggested that diesel replacement has a payback period of 2 years or less, while electric pump would be closer to 6 years (only if electricity is available).
It is advised farmers to look at a payback period of 3 years. Then there are plenty of other technical matters involved i.e. the depth of the water table, the dynamic and static head of water, the kind of crops that are being grown, irrigation patterns and practices, the size of the farm and farmer and the ability to actually pay it back - etc. The cost of the tube well at Rs 1.1 million is adequate for a half cusec system. The challenge would be to maintain quality and provide after sales support.
The real benefits for the farmer are control over water compared to canal fed irrigation as the availability of water for almost 300 or more days a year can grow more crops because of availability can look at things like drip irrigation and tunnel farming, he added.