Anne G. Timu

An approach for assessing whether agricultural projects help smallholders transition to better livelihood strategies: A Malawian case study

Agricultural projects typically aim to promote the uptake of project components amongst targeted small farm populations to improve their farm productivity and welfare. While this approach can be an important first step towards improving smallholder livelihoods, it ignores alternative and often superior livelihood options that might arise within the rural transformation process, particularly in commercial agriculture and the rural nonfarm economy. We argue that the design of smallholder projects implemented within regions already undergoing a dynamic transformation and/or projects which have significant value chain components, should be broadened to assist smallholders in making successful transitions to their best livelihood options. For such projects, monitoring and evaluation activities should track livelihood transitions as well as the usual assessments of productivity and welfare outcomes. To help operationalize such an approach, we propose a typology of smallholder livelihood strategies that can track transitions over time and illustrate its use with data from the Sustainable Agricultural Production Program (SAPP), an agricultural value chain project in Malawi. Using available household panel data and quasi-experimental econometric approaches, we find that the project helped smallholders transition out of subsistence farming to market-oriented farming and helped already existing market-oriented farmers remain as such. Even though the project did not have any specific components designed to promote off-farm incomes, nevertheless, it facilitated many farm household transitions to off-farm diversified livelihoods, possibly due to spillover benefits generated within the local nonfarm economy. All SAPP facilitated transitions led to increases in household incomes. We conclude with some lessons for designing, monitoring, and the evaluation of future agricultural projects.

Evaluating the gendered credit constraints and uptake of an insurance-linked credit product among smallholder farmers in Kenya

Evaluating the gendered credit constraints and uptake of an insurance-linked credit product

Smallholder farmers in low- and medium-income countries lack sufficient access to agricultural production credit that can help them adopt new technologies and improve their farm production. Compared to men, women smallholder farmers face additional social, and economic barriers that further limit their credit access. Bundling agricultural credit with insurance, or risk contingent credit (RCC), provides a mechanism for addressing some of the credit access constraints and reducing credit rationing among smallholder farmers. In this paper, we evaluate the gendered determinants of credit rationing and the gender differences of the effects of RCC innovation on credit uptake decisions. We use three-wave panel data from a randomized control trial (RCT) in Kenya. We find that female-headed households (FHH) are significantly more risk rationed (or demand-side credit constrained) compared to male-headed households (MHH), however, the gender of the household head does not significantly determine the household quantity rationing status (supply-side constrained). We also find that farmers randomly assigned to be offered the RCC are up to four percent more likely to take up credit. RCC’s impacts on credit uptake decisions do not vary with the gender of the household head, however, RCC has a differential positive and significant impact on the credit uptake decisions of farmers that were previously (at baseline) risk rationed. Based on these findings, we suggest that policies should focus on reducing gendered demand-side barriers to credit access, especially among poorer women households. Climate financing innovations such as RCC should also be designed and delivered in a gender-inclusive manner to accommodate women farmers who face time, liquidity, and financial literacy barriers.