1. Why is Food Security Tied to Electricity? Food security depends on groundwater –50-60% of irrigated land –55-60% of population –70-80% of value of agricultural production Groundwater irrigation rests on access to electricity –Choice between diesel and electricity –In some areas of deep water tables, electricity is essential –25-33% of electricity production goes to irrigation

2. Electricity-Groundwater Linkages: A Potted History Importance of electricity for agricultural intensification as part of Green Revolution 1970s: shift to flat rate tariffs as a populist measure –De metering –Dis-incentives for efficient electricity and water use Ripple effects on electricity sector –Culture of unaccountability –Theft by non-agricultural users attributed to farmers –Dependence on cross subsidy for agriculture

3. Trapped in a Low Level Equilibrium Electricity sector faces pressure to reduce technical and financial losses –Disincentive to serve loss-making farmers –Farmers first to face load shedding –Disincentive to rural electrification Farmers face low quality and declining power –Unreliable supply has implications for crop yield –Bad quality power leads to farmer unrest Existence of a high equilibrium does not guarantee you will get there –Studies showing farmers willing to pay more conceal a “credibility gap”

4. Micro Story Example from Haryana (World Bank) –Tariff = 8% of gross farm income –Add motor/pump maintenance = 15% –Add fixed cost = 25% (15%-38%) Example from AP (Dossani and Ranganathan) –Pump burn-out adds 78% to cost –Rostering leads to additional 15% use of power Conclusion: Farmers are not getting fat and happy on electricity subsidies for irrigation

5. Bottom Line Agricultural productivity and food security are threatened by –Persistent pattern of linkages between electricity and agriculture –Persistent perverse incentives to limit quantity and quality of electricity supply to farmers

6. Four Imperfect Solutions Economic: Get rid of subsidies –Ignores politics Administrative: “rational flat tariff” –No correction in perverse price signal –Hard to administer without corruption Technical: Separate feeders –Needs accompanying larger solutions Institutional: Collective action –Need to be embedded in larger changes

7. Towards a Political Solution Approach electricity-groundwater conundrum from the agriculture side –True cost of low quality power to farmers –What would it take to reverse the credibility deficit Negotiate a transition path from low to high equilibrium Devise an implementation strategy to reduce costs of transition