Farming


Original abstracts from the papers in the database are provided below. All abstracts are drawn directly from the papers referenced. Links to access the papers are provided, although
the papers may also be available from other web sources. By providing links to other sites, the United Nations Foundation and ExxonMobil Foundation do not guarantee, approve, or endorse the information or products available on these sites.

  • Marketing Complex Financial Products in Emerging Markets: Evidence from Rainfall Insurance in India

    Gaurav, Cole and Tobacman (2011)

    Original abstract:

    Recent financial liberalization in emerging economies has led to the rapid introduction of new financial products. Lack of experience with financial products, low levels of education, and low financial literacy may slow adoption of these products. This article reports on a field experiment that offered an innovative new financial product, rainfall insurance, to 600 small-scale farmers in India. A customized financial literacy and insurance education module communicating the need for personal financial management and the usefulness of formal hedging of agricultural production risks was offered to randomly selected farmers in Gujarat, India. The authors evaluate the effect of the financial literacy training and three marketing treatments using a randomized controlled trial. Financial education has a positive and significant effect on rainfall insurance adoption, increasing take-up from 8% to 16%. Only one marketing intervention, the money-back guarantee, has a consistent and large effect on farmers' purchase decisions. This guarantee, comparable to a price reduction of approximately 40%, increases demand by seven percentage points.

    Intervention settings: Rural: Gujarat.

    Intervention description: Farmers offered rainfall insurance, with some offered a money-back guarantee (equivalent to a 60% price discount). Half of the treatment group was also given financial literacy training in two three-hour sessions.

    Methodology: RCT.

    Sample: Small-scale land-owning farmers from rainfed villages in coastal districts; 2/3 of sample own less than 4 hectares of land. Gender included in model but gender-specific effects not reported.

    Findings: The training increased the take up by 8.1% (compared to a base take-up rate of 8%). The 60% price discount increases the base take-up rate by 6.9 percentage points.

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  • The miracle of microfinance? Evidence from a randomized evaluation

    Banerjee et al (2010)

    Intervention settings: Urban: Hyderabad slums

    Intervention description: MFI branches were opened in 52 randomly selected urban slums.

    Methodology: RCT

    Sample:

    Findings: Expenditure on durable goods and the number of new businesses increased significantly in treated areas. No effect on household expenditure per equivalent adult or women's decision-making role within the household after 15-18 months.

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  • Insurance, credit, and technology adoption: Field experimental evidence from Malawi

    Giné and Yang (2009)

    Original abstract:

    Does production risk suppress the demand for credit? We implemented a randomized field experiment to ask whether provision of insurance against a major source of production risk induces farmers to take out loans to adopt a new crop technology. The study sample was composed of roughly 800 maize and groundnut farmers in Malawi, where by far the dominant source of production risk is the level of rainfall. We randomly selected half of the farmers to be offered credit to purchase high-yielding hybrid maize and groundnut seeds for planting in the November 2006 crop season. The other half of farmers were offered a similar credit package, but were also required to purchase (at actuarially fair rates) a weather insurance policy that partially or fully forgave the loan in the event of poor rainfall. Surprisingly, take-up was lower by 13 percentage points among farmers offered insurance with the loan. Take-up was 33.0% for farmers who were offered the uninsured loan. There is suggestive evidence that reduced take-up of the insured loan was due to farmers already having implicit insurance from the limited liability clause in the loan contract: insured loan take-up was positively correlated with farmer education, income, and wealth, which may proxy for the individual's default costs. By contrast, take-up of the uninsured loan was uncorrelated with these farmer characteristics.

    Intervention settings: Rural: Central Malawi.

    Intervention description: Farmers offered either credit to purchase high-yielding hybrid seeds or credit plus a requirement to purchase rainfall insurance at an actuarially fair price.

    Methodology: RCT.

    Sample: Maize and groundnut farmers in 32 localities.

    Findings: Take up was 33% in the first group, and 13% lower in the second group.

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  • Investing Cash Transfers to Raise Long-Term Living Standards

    Gertler, Martinez and Rubio-Codina (2012)

    Original abstract:

    The authors test whether poor households use cash transfers to invest in income generating activities that they otherwise would not have been able to do. Using data from a controlled randomized experiment, they find that transfers from the Oportunidades program to households in rural Mexico resulted in increased investment in micro-enterprise and agricultural activities. For each peso transferred, beneficiary households used 88 cents to purchase consumption goods and services, and invested the rest. The investments improved the household's ability to generate income with an estimated rate of return of 17.55 percent, suggesting that these households were both liquidity and credit constrained. By investing transfers to raise income, beneficiary households were able to increase their consumption by 34 percent after five and a half years in the program. The results suggest that cash transfers to the poor may raise long-term living standards, which are maintained after program benefits end.

    Intervention settings: Rural areas in 7 states: PROGRESA.

    Intervention description: Conditional cash transfers.

    Methodology: RCT.

    Sample: HH from 506 communities.

    Findings: Per capita consumption was 5.6% higher in treatment households even 4 years after transfers to control households were initiated. (CCTs used in part to finance productive investments.)

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  • Environmental and Gender Impacts of Land Tenure Regularization in Africa: Pilot Evidence from Rwanda

    Ali, Deininger and Goldstein (2011)

    Original abstract:

    Although increased global demand for land has led to renewed interest in African land tenure, few models to address these issues quickly and at the required scale have been identified or evaluated. The case of Rwanda's nation- wide and relatively low-cost land tenure regularization program is thus of great interest. This paper evaluates the short-term impact (some 2.5 years after completion) of the pilots undertaken to fine-tune the approach using a geographic discontinuity design with spatial fixed effects. Three key findings emerge from the analysis. First, the program improved land access for legally married women (about 76 percent of married couples) and prompted better recordation of inheritance rights without gender bias. Second, the analysis finds a very large impact on investment and maintenance of soil conservation measures. This effect was particularly pronounced for female headed households, suggesting that this group had suffered from high levels of tenure insecurity, which the program managed to reduce. Third, land market activity declined, allowing rejection of the hypothesis that the program caused a wave of distress sales or widespread landlessness by vulnerable people. Implications for program design and policy are discussed.

    Intervention settings: Rural (3 locations) and peri-urban (1 location).

    Intervention description: Land titling pilot covering 14,908 parcels with 3,448 hectares.

    Methodology: Regression discontinuity design with spatial fixed effects.

    Sample: 3,513 households (22% female-headed) drawn from both sides of the boundaries of four pilot cells.

    Findings: The program improved land access for legally married women (about 76% of married couples) and prompted better recordation of inheritance rights without gender bias. The analysis finds a large impact on investment and maintenance of soil conservation measures. This effect was particularly pronounced for female headed households, suggesting that this group had suffered from high levels of tenure insecurity, which the program managed to reduce. Land market activity declined, allowing rejection of the hypothesis that the program caused a wave of distress sales or widespread landlessness by vulnerable people. No effect on the perceived risk of expropriation.

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