The Returns To Empowerment In Diversified Rural Household Evidence From Niger

Niger is a landlocked Sahelian country, two-thirds of which is in the Sahara Desert. Although only one-eighth of the land considered arable, the overwhelming majority of Niger’s households is involved in rain-fed agriculture largely for subsistence. Given erratic rainfall and low soil fertility, most smallholders fail to produce enough food to meet household requirements. Income diversification is thus the norm among these rural households and different income-generating activities offer alternative pathways out of poverty for households as well as a mechanism for managing risk in an uncertain environment. Empowerment is likely to be an important factor affecting the ability of households to diversity their activity portfolio and may also affect activity-incomes and thereby household welfare. In this study, I use new household- and individual-level empowerment data from the Tahoua region of Niger and regression analysis to quantify the effects of a range of human capital measures including empowerment on the activity portfolio and activity incomes of rural households. My findings reveal that empowerment in particular plays an important role in enabling households to engage in mixed diversification strategy, which combines staple cropping with nonfarm activities and migration. This is a “last resort” strategy for households in lower landholding quintiles to ensure food security and complement an inadequate resource base. Controlling for activity choice, three empowerment indicators in particular—confidence, group membership, and tenure security—strongly and positively affect income from staple and cash cropping, which on average makes up about 90 percent of household income. In fact, empowerment is the only human capital variable that strongly and positively affects total household income, opening up interesting avenues for policy interventions aimed at augmenting a household’s noncognitive ability through, for example, leadership training or encouraging producer group membership—to increase incomes of the rural poor.

A goal of agricultural policy in India has been to reduce farmers’ dependence on informal credit. To that end, recent initiatives have been focused explicitly on rural areas and have had a positive impact on the flow of agricultural credit. But despite the significance of these initiatives in enhancing the flow of institutional credit to agriculture, the links between institutional credit and net farm income and consumption expenditures in India are not very well documented. Using a large national farm household–level dataset and instrumental variables two-stage least squares estimation methods, we investigate the impact of institutional farm credit on farm income and farm household consumption expenditures. Our findings show that in India, formal credit is indeed playing a critical role in increasing both the net farm income and per capita monthly household expenditures of Indian farm families. We also find that, in the presence of formal credit, social safety net programs such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) may have unintended consequences. In particular, MGNREGA reduces both net farm income and per capita monthly household consumption expenditures. In contrast, in the presence of formal credit, the Public Distribution System may increase both net farm income and per capita monthly household consumption expenditures.

It is widely acknowledged that unmitigated risks provide a disincentive for otherwise optimal investments in modern farm inputs. Index insurance provides a means for managing risk without the burdens of asymmetric information and high transaction costs that plague traditional indemnity-based crop insurance programs. Yet many index insurance programs that have been piloted around the world have met with rather limited success, so the potential for insurance to foster more intensive agricultural production has yet to be realized. This study assesses both the demand for and the effectiveness of an innovative index insurance product designed to help smallholder farmers in Bangladesh manage risk to crop yields and the increased production costs associated with drought. Villages were randomized into either an insurance treatment or a comparison group, and discounts and rebates were randomly allocated across treatment villages to encourage insurance take-up and to allow for the estimation of the price elasticity of insurance demand. Among those offered insurance, we find insurance demand to be moderately price elastic, with discounts significantly more successful in stimulating demand than rebates. Farmers who are highly risk averse or sensitive to basis risk prefer a rebate to a discount, suggesting that the rebate may partially offset some of the implicit costs associated with insurance contract nonperformance. Having insurance yields both ex ante risk management effects and ex post income effects on agricultural input use. The risk management effects lead to increased expenditures on inputs during the aman rice-growing season, including expenditures for risky inputs such as fertilizers, as well as those for irrigation and pesticides. The income effects lead to increased seed expenditures during the boro rice-growing season, which may signal insured farmers’ higher rates of seed replacement, which broadens their access to technological improvements embodied in newer seeds as well as enhancing the genetic purity of cultivated seeds.

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. Farmers answered a detailed questionnaire designed to learn about losses during harvest and transport, processing, and storage and which measures both total losses and reductions in crop quality. The findings indicate that fewer than half of households report suffering losses conditional on growing each crop. In addition, conditional on losses occurring, the loss averages between 5 and 12 percent of the farmer’s total harvest. Compared to nationally representative data that measure losses using a single survey question, this study documents a far greater percentage of farmers experiencing losses, though the unconditional proportion lost is similar. We find that losses are concentrated in harvest and processing activities for groundnuts and maize; for soy, they are highest during processing. Existing interventions have primarily targeted storage activities; however, these results suggest that targeting other activities may be worthwhile.

Despite recent modifications, the Economic Partnership Agreement (EPA) between the European Union (EU) and West African (WA) countries is still being criticized for its potential detrimental effects on WA countries. This paper provides updated evidence on the impact of the EPA on these countries. A dynamic multicountry, multisector computable general equilibrium trade model with modeling of the dual-dual economy and with a consistent tariff aggregator is used to simulate a series of new scenarios that include updated information on the agreement. We also go beyond estimating macrolevel economic effects to analyze the impacts on poverty. The policy simulation results show that the implementation of the EPA between the EU and WA countries would have marginal but positive impacts on Burkina Faso and Côte d’Ivoire and negative impacts on Benin, Ghana, Nigeria, Senegal, and Togo. The impact on poverty indicators in Ghana and Nigeria would be marginal. From the perspective of WA countries, this study supports the view that recent EU concessions are not sufficient and that domestic fiscal reforms are needed in WA countries themselves.

In many developing countries, gift expenses account for a substantial share of total household expenditures. As incomes rise, gift expenses are escalating in several developing countries. We develop a theoretical model to demonstrate how (unequal) income growth may trigger “gift competition” and drive up the financial burden associated with gift exchange. We use unique census-type panel data from rural China to test our model predictions and demonstrate that (1) the value of gifts responds to the average gift in the community, (2) the escalation of gift giving may have adverse welfare implications (especially for the poor), and (3) escalating gift expenses crowd out expenditures on other consumption items.

Participation in household decisions and control over assets are often used as indicators of bargaining power. Yet spouses do not necessarily provide the same answers to questions about these topics. We examine differences in spouses’ answers to questions regarding who participates in decisions about household activities, who owns assets, and who decides to purchase assets. Disagreement is substantial and systematic, with women more likely to report joint ownership or decision making and men more likely to report sole male ownership or decision making. Analysis of correlations between agreement and women’s well-being finds that agreement on joint decision making/ownership is generally positively associated with beneficial outcomes for women compared with agreement on sole male decision making/ownership. Cases of disagreement where women recognize their involvement but men do not are also positively associated with good outcomes for women, but often to a lesser extent than when men agree that women are involved.

The focus in this paper is on two relatively large maize-based contract farming (CF) schemes with fixed input packages (Masara and Akate) and a number of smaller and more flexible CF schemes in a remote region in Ghana (Upper West). Results show that these schemes led to improved technology adoption and yield increases. In addition, a subset of maize farmers with high yield improvements due to CF participation had high gross margins. However, on average, yields were not high enough to compensate for higher input requirements and cost of capital. On average, households harvest 29–30 bags (100 kg each), or 2.9–3.0 metric tons, of maize per hectare, and the required repayment for fertilizer, seed, herbicide, and materials provided under the average CF scheme is 21–25 bags (50 kg each) per acre, or 2.6–3.0 tons per hectare, which leaves almost none for home consumption or for sale. Despite higher yields, the costs to produce 1 ton of maize under CF schemes remain high on average—higher than on maize farms without CF schemes, more than twice that of several countries in Africa, and more than seven times higher than that of major maize-exporting countries (the United States, Brazil, and Argentina). Sustainability of these CF schemes will depend on, from the firms’ perspective, minimizing the costs to run and monitor them, and from the farmers’ perspective, developing and promoting much-improved varieties and technologies that may lead to a jump in yields and gross margins to compensate for the high cost of credit.