Irrigation Equipment Production in Central Asia: Industrializing the Water Sector
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Report
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Summary
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Presentation
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Key findings
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The current market for irrigation equipment is estimated at $130-200 million, with more than 90% of demand met by imports. At the same time, countries in the region are already taking a number of important steps to expand opportunities for the use of modern irrigation equipment in agriculture. Governments are offering significant financial and non-financial support to farmers in the region. In addition, government development programmes are planned in Central Asia to expand irrigated areas and introduce new modern irrigation technologies in the near future. The projected increase in irrigated area to 10.6 million hectares by 2040 will lead to an increase in demand for irrigation technologies and related equipment. The demand for new equipment is expected to reach 2 million units, with a potential local production of $426 million per year. At the same time, the annual market for new sprinklers will be $114 million per year and for drip irrigation $220 million. Localisation of irrigation equipment production in Central Asia will help to keep these investments in the local economy.
The report emphasises the importance of forming a cluster model of industry development, which will reduce dependence on imports, create new jobs and increase investment attractiveness of the sector. At the same time, for the full formation of such a model, the report describes in detail a three-stage action plan for improving the irrigation equipment market, from the creation of a critical mass of necessary production capacity to the final formation of effective clusters based on the international methodology of UNIDO.
Key recommendations include: improving industrial policy in the field of clustering of production initiatives, improving incentive measures of state support for producers and consumers of irrigation equipment, digitalisation of water resources and development of educational programmes for training specialists in the field of irrigation technologies. The introduction of advanced methods of drip and sprinkler irrigation and the modernisation of infrastructure will be the basis for the formation of a sustainable irrigation equipment market in the region.
The study is based on macro-economic analysis, sector statistics and irrigation technology demand forecasts to 2040. EDB's joint report with UNIDO states that the establishment of a dedicated irrigation equipment manufacturing sector can be a response to the growing water challenges in Central Asia and an opportunity to increase the region's industrial potential.
Forecast of demand for technical means and equipment for irrigation up to 2040, thousand units
Source: EDB calculations.
Irrigation equipment demand up to 2040 across countries of the region, %
Source: EDB calculations.