Low-income households around the world are particularly vulnerable to shocks, but also the least prepared when a shock hits.
Low-income households around the world are particularly vulnerable to shocks, but also the least prepared when a shock hits.
Researchers and policymakers have long understood the benefits of crop insurance but have been consistently disappointed by the poor performance of these programs. Rarely have programs seen sizeable take-up rates without support through large government subsidies, and in many countries, demand has been meager even at prices well below fair-market rates.
This article presents a review of seven guides for gender-equitable value chain development (VCD). The guides advocate persuasively the integration of gender into VCD programming and raise important issues for designing more inclusive interventions. However, gaps persist in their coverage of gender-based constraints in collective enterprises, the influence of norms on gender relations, and processes to transform inequitable relations through VCD. Guidance for field implementation and links to complementary value chain tools are also limited.
We show theoretically that the presence of basis risk in index insurance makes it a complement to informal risk sharing, implying that index insurance crowds-in risk sharing and leading to a prediction that demand will be higher among groups of individuals that can share risk. We report results from rural Ethiopia from a first attempt to market weather insurance products to existing informal risk-sharing groups. The groups were offered training on risk management and the possible benefits of holding insurance.
In October 2011,the CGIAR program on Climate Change, Agriculture and Food Security (CCAFS) and the Index Insurance Innovation Initiative (I4) organized a jointworkshop hosted by the International Food Policy Research Institute (IFPRI). The workshop was designed to identify and address issues surrounding index‐based insurance for smallholder farmers and the rural poor in the developing world. Emphasis was placed on identifying key areas of research and learning for the academic and policy community to pursue.
In this paper we examine which farmers would be early entrants into weather index insurance markets in Ethiopia, were such markets to develop on a large scale. We do this by examining the determinants of willingness to pay for weather insurance among 1,400 Ethiopian households that have been tracked for 15 years as part of the Ethiopia Rural Household Survey. This provides both historical and current information with which to assess the determinants of demand. We find that educated, rich, and proactive individuals were more likely to purchase insurance.
We conduct a framed field experiment in rural Ethiopia to test the seminal hypothesis that insurance provision induces farmers to take greater, yet profitable, risks. Farmers participated in a game protocol in which they were asked to make a simple decision: whether to purchase fertilizer, and if so, how many bags. The return to fertilizer was dependent on a stochastic weather draw made in each round of the game protocol. In later rounds of the game protocol, a random selection of farmers made this decision in the presence of a stylized weather-index insurance contract.
Asymmetry of information is a fundamental problem in agricultural markets. Production contracts remain incomplete if product quality attributes measured by the buying company remain unobservable for the selling farmer. Opportunistic buyers would report lower than actual output quality, negatively affecting farmers’ compensation given it is directly linked to quality. When farmers factor in the buyer’s opportunistic behavior, underinvestment may occur, negatively affecting farm productivity.
Farmers in rural Bangladesh face multiple sources of uninsured risk to agricultural production and household assets. In this paper, we present results from an experimental demand - elicitation exercise in rural Bangladesh to shed light on smallholder farmers’ interest in formal insurance products. We propose a suite of insurance and savings products, and we randomly vary the price of one insurance option (area - yield insurance) and the presence of one of the savings options (group savings).
This paper provides an overview of a research project that assessed the long-term impact of three antipoverty interventions in Bangladesh—the introduction of new agricultural technologies, educational transfers, and microfinance—on monetary and non monetary measures of well-being. This paper begins by setting out the conceptual framework, methodology, and empirical methods used for the evaluation of long-term impacts. It discusses the context of the evaluations and the longitudinal data used.
This paper investigates inclusive growth in agricultural value chains, with a focus on smallholder participation, upgrading behavior, and outcomes related to agricultural productivity, agricultural profits, and smallholder incomes. The purpose of the paper is to advance understanding of inclusive growth by reviewing empirical evidence from twelve agricultural value chains that have engaged and benefited smallholders. The review of evidence focuses on three central questions:
Production, Finance, and Improved Technologies (PROFIT) was a multi-sector value chain intervention in Zambia from 2005-2011. It focused on upgrading retail inputs and services and measuring the effect on beef and cotton value chains. Among the findings were:
- Shifts in approach, emphasis and location during the course of program complicated or invalidated parts of the research plan.
- The combination of quantitative and qualitative evidence presented suggests positive outcomes and impacts for smallholder participants in the project's beef and retail activities.
Producer penalties and bonuses can help reduce the incidence of side-selling and better align farmers' incentives with purchasers'. Bonuses can help ensure that farmers take the necessary measurements to produce the quality characteristics often present in contract farming arrangements. A randomized controlled experiment with milk producers in Vietnam showed that the presence of penalties and bonuses drove farmers to higher input use which resulted in higher quality milk.
The objective of this paper is to summarize available evidence on key questions for the Feed the Future Learning Agenda theme on expanded markets, value chains and increased investments, and document expert opinion on gaps in the scientific literature for this theme that are in most urgent need of attention.
Among the gaps identified are the lack of rigorous impact assessments of value chain interventions. Specifically "the vast majority of the data available measure outcomes that suggest reductions in poverty rather than quantify impacts on poverty."
Weather variations crucially act the wellbeing of farmers in developing countries yet weather insurance is rather rare. I develop and estimate a dynamic stochastic optimization model to assess the impact of weather insurance on the consumption, investment, and welfare for farmers in developing countries. The parameters of the model are pinned down with a combination of calibration and structural estimation using data from Malawi.
Part of the constraints facing contract farming are the lack of proper procedures for measuring quality in production. If the buyer handles quality assurance then they may have an incentive to report that production was of lower quality in order to offer a lower price. The producer knowing this, in turn will lower their expectation to the income from contact farming and be less likely to contract.
Using both quantitative and qualitative research methods, the Gender, Agriculture, and Assets Project (GAAP) worked with CARE-Bangladesh to assess the impact of the Strengthening the Dairy Value Chain Project (SDVCP) on (1) women’s ownership of assets, men’s ownership of assets, and jointly held assets; (2) gender norms around asset ownership and control; (3) gender norms regarding decisionmaking in these areas surrounding the dairy value chain; and (4) trade-offs and time costs involved in project participation.
This report summarizes the experiences of the consulting firm J.E. Austin Associates in performing value chain analysis and interventions.
- Base project designs on good market analysis and direct them toward market opportunity.
- Conduct direct industry benchmarking to identify, design, and generate stakeholder buy-in.
- Leverage value chain analysis to empower stakeholders to participate in improving their sector competitiveness through sustainable interventions.
We analyze the effectiveness of a new approach in providing weather index-based insurance products to low-income populations. The approach is based on the concept of providing multiple weather securities that pay a fixed amount if the event written on the security (that monthly rainfall at a nearby weather station falls below a stated cutoff) comes true. A theoretical model is developed to outline the conditions in which weather securities could outperform crop-specific weather index-based insurance policies.
This article draws on four contrasting cases of value chain development (VCD) in Nicaragua to assess approaches and tools used in design and implementation. We interviewed 28 representatives from the international NGOs leading the interventions, the local NGOs that participated in implementation, principal buyers, and cooperatives.
The majority of the world’s poorest people live in South Asia and Sub-Saharan Africa. Most of these households engage in rural farming and subsist on incomes at or below the international extreme poverty line of US$1.90 per person per day (our working definition for the ‘extremely poor’). CARE, Save the Children, and World Vision are applying inclusive value chain development (VCD) among households living in extreme poverty in an effort to catalyse sustained food security.
Smallholder farmers in Zambia comprise 85 per cent of the farmers’ population. Such farmers are regarded as not creditworthy and furthermore their agricultural productivity could be improved. The aim of this paper is to present recent evidence on value chain financing (VCF) as a framework to increase access to agricultural finance for Zambian smallholder farmers. Such financing will act as an enabler to mechanize and, in turn, might improve productivity. Qualitative data collection techniques were followed to provide the results as presented in three illustrative case studies.
This study analyzes the Laiterie Du Berger (LDB)’s milk supply chain and its contribution to strengthening the food security and socioeconomic resources of Senegalese Sahelian pastoral households. Porter’s value chain model is used to characterize the innovations introduced by the LDB dairy in its milk inbound logistics and supplier relationships. A socioeconomic food security index and qualitative data are used to assess the dairy’s supply chain’s contribution to strengthen smallholder households’ livelihoods.
This paper analyses governance structures in Uganda’s smallholder pig value chains by applying the New Institutional Economics framework. It utilises cross sectional and qualitative survey data from randomly selected pig value chain actors in 4 districts. A multinomial logit model is applied to assess the determinants of vertical integration among pig traders. The findings indicate that most relationships at the pig production node of the value chain are based on spot market governance structures supported by personal relationships and trust.
Recent literature suggests that to make value chains in changing agrifood systems in sub-Saharan Africa more inclusive, intermediary institutions should foster coordination. The hub concept has been applied as such an intermediary institution that coordinates advisory services, input supply and smallholder access to markets.
The authors first discuss the value of value chains and how they can benefit from resilience. They follow this with a detailed analysis of the risks and resilience of different components of the value chain and conclude with a discussion of the business of resilience.
Here is a list of key messages from this paper:
Accurately assessing risk is key to providing appropriately priced loans to rural producers. This paper examines non-parametric techniques for risk scoring to avoid the erroneous rejection of credit-worthy loan applicants. Both parametric and non-parametric techniques were tested against simulated data and then evaluated on microfinance loan applicants in Peru. Because non-parametric techniques impose fewer modeling assumptions, they are able to better predict default.
This paper attempts to inject more rigorous quantitative methods into value chain analysis. Approaches examined include System Dyanimcs (SD) that model flows and relationships between actors with which one can examine the impact of alternative scenarios over time. Agent-Based Models (ABM) model individual farmers, institutions, and social groupings. In SD models, actors are assumed to be the same whereas in ABM models a set of heterogenous characteristics may be defined for each agent.
This toolkit aims to equip value chain development programmers to design effective interventions that reach and impact the very poor. It profiles tools that are particularly applicable in the value chain selection and value chain analysis phases of a project, as well as assessment tools that can be used throughout the project cycle. Many tools are used by value chain development practitioners to guide value chain selection 4 and value chain analysis,5 of which several focus on understanding and benefiting particular populations.
This Institutional Learning and Change Initiative working paper provides a thoughtful discussion of the statistical assumptions underlying randomized controlled trials as well as guidance for implementation and interpreting results.
This ILRI discussion paper reviews 20 value chain interventions and discusses the econometric techniques used to address the validity of findings. It explores the use of propensity score matching, instrumental variables, difference in difference, regression discontinuity, and randomized controlled trials. Qualitative and participatory methods are also examined with the idea that they may be able to better capture the complexity of value chain processes.
This article puts forward a method for the analysis of constraints faced by developing countries’ smallholder producers. It is consistent with theories of constraints, efficient in terms of cost and researchers’ time, and accessible to a non-technical audience. A hybrid of workshop discussion and individual data collection, it also draws on data and analyses available in most developing countries.
In the past, discussions about food security have typically focused on thequantity of food that people eat rather than the quality. However, micronutrient deficiencies are becoming increasingly recognized as a serious threat to the health and economic development of low-income populations. As a result, nutrition is garnering more and more attention in the development community.
Wheat is one of the four most important food grains in Ethiopia. As a source of calories in the diet, wheat is second to maize. In terms of the area of production, wheat is fourth, after teff, maize, and sorghum. In terms of the value of production, it is 4th or 5th, after teff, enset, and maize, and approximately tied with sorghum.
Wheat production has expanded rapidly in the past decade. According to the CSA, wheat production has grown at 7.5% per year since 1995-96 and at 9.3% over the past decade.
The women’s crop tool attempts to elicit women’s and men’s levels of control over important decision making (land allocation, land preparation, use of inputs, weeding, use of labor, harvesting, marketing, use of income) for their main crops. Both qualitative (FGDs) and quantitative (HH survey) measurements can be done to collect sex-disaggregated data on control. This can reveal both women’s and men’s perception of their own control and each other’s control.
Reducing food loss and waste are important policy objectives prominently featured in the United Nation’s Sustainable Development Goals. To optimally design interventions targeted at reducing losses, it is important to know where losses are concentrated between the farm and fork. This paper measures farmlevel postharvest losses for three main crops—maize, soy, and groundnuts—among 1,200 households in Malawi.
The second Sustainable Development Goal (SDG) challenges the world to achieve food security and improve nutrition by 2030 but food insecurity and micronutrient deficiencies remain stubbornly high and rates of overweight and obesity are rising throughout the world. To attain SDG 2, food systems must deliver more nutritious food to populations. For food systems to do so, value chains for micronutrient-rich foods must be improved, making such foods more available and affordable to consumers.
A major challenge when designing a National Agricultural Investment Plan (NAIP) is deciding how to prioritize between different opportunities, e.g., which value-chains should be promoted over others?
The SELEVER study is designed to evaluate the impact of an integrated agriculture–nutrition package of interventions (including poultry value chain development, women’s empowerment activities, and a behavior change communications strategy to promote improved diets and feeding, care, and hygiene practices) on the diets, health, and nutritional status of women and children in Burkina Faso. This paper presents the rationale and study design.
In an effort to better understand agriculture value chains market needs in relation to CGIAR Research Program on Policies, Institutions, and Markets (PIM) learning hubs, the International Livestock Research Institute (ILRI) conducted a market needs study to assess the current situation and find any possible common ground between the East and southern Africa (ESA) PIM learning hub and the needs and expectations of key actors in the market.