Using agriculture for development: Supply- and demand-side approaches

For most poor countries of today, using agriculture for development is widely recognized as a promising strategy. Yet, in these countries, investment in agriculture has mostly been lagging relative to international norms and recommendations. Current wisdom on how to use agriculture for development is that it requires asset building for smallholder farmers, productivity growth in staple foods, an agricultural transformation (diversification of farming systems toward high value crops), and a rural transformation (value addition through rural non-farm activities linked to agriculture). This sequence has too often been hampered by extensive market and government failures. We outline a theory of change where the removal of market and government failures to use this Agriculture for Development strategy can be addressed through two contrasted and complementary approaches. One is from the “supply-side” where public and social agents (governments, international and bilateral development agencies, NGOs, donors) intervene to help farmers overcome the major constraints to adoption: liquidity, risk, information, and access to markets. The other is from the “demand-side” where private agents (entrepreneurs, producer organizations) create incentives for smallholder farmers to modernize through contracting and vertical coordination in value chains. We review the extensive literature that has explored ways of using Agriculture for Development through these two approaches. We conclude by noting that the supply-side approach has benefited from extensive research but met with limited success. The demand-side approach has promise, but received insufficient attention and is in need of additional rigorous research which we outline

Toward a Territorial Approach to Rural Development

This paper explores a territorial approach to rural development in Latin America. It first reviews evidence that progress in rural social development has not been accompanied by reductions in income poverty and inequality. It then assesses qualitative changes that have occurred in rural incomes and the emergence of new opportunities for rural poverty reduction and draws implications for the potential of a territorial approach to rural development. Recent experiences with territorial approaches are briefly reviewed and lessons extracted for the implementation of such an approach. It concludes with a series of recommendations for implementation of a territorial approach to rural development.rural development, rural poverty, territorial approach, inequality, Latin America, Community/Rural/Urban Development, O10, O13, O15, O18,

Incorporating Insurance Provisions in Microfinance Contracts: Learning from Visa®?

microfinance, insurance, reputation

Inelastic Dark Matter at DAMA, CDMS and Future Experiments

The DAMA annual modulation signature, interpreted as evidence for a spin-independent WIMP coupling, seems in conflict with null results from CDMS. However, in models of ``inelastic dark matter'', the experiments are compatible. Inelastic dark matter can arise in supersymmetric theories as the real component of a sneutrino mixed with a singlet scalar. In contrast with ordinary sneutrino dark matter, such particles can satisfy all experimental constraints while giving the appropriate relic abundance. We discuss the modifications to the signal seen at DAMA, in particular noting the strong suppression of low energy events in both modulated and unmodulated components. We discuss future experiments, with emphasis on distinguishing inelastic dark matter from ordinary dark matter, and stressing the significance of experiments with heavy target nuclei, such as xenon and tungsten.Comment: 4 pages; to appear in the proceedings of 5th International UCLA Symposium on Sources and Detection of Dark Matter and Dark Energy in the Universe (DM 2002), Marina del Rey, California, 20-22 Feb 200

Incorporating insurance provisions in microfinance contracts: Learning from Visa®?

We examine a simple extension to existing credit contacts for the poor (‘microfinance contracts’), that would allow financial institutions to provide repayment insurance to their clients. The proposed contract uses the repeated nature of loans to build credit records that borrowers in good standing can use to insure themselves against default in case of adverse income shocks. After documenting borrowers’ desire for insurance using data from a microfinance programme in Guatemala, we derive sufficient conditions for the proposed contract to reduce borrower vulnerability while improving repayment rates. These conditions are quite similar to those that credit-card and automobile-insurance companies seem to apply to deter moral hazard and adverse selection among their subscribers. We close the paper with a discussion on why institutions lending to the poor may face particular implementation problems because of the history of past failures of credit programmess for the poor. – microfinance ; insurance ; reputatio

How experimental research in agriculture has gone from lab to field

Agriculture has a long tradition of randomized experiments in the research station and of comparative demonstration plots under scientist control. The BDK Nobelists have pioneered randomized field experiments under agency control to fight global poverty, thus making behavior, contextual circumstances, and institutional constraints key determinants of outcomes. In agriculture, experimentation has massively responded in jumping the fence from lab to field, with already major advances as to how to better use agriculture for development. We document how this has happened and how the methodology of field experiments has to be adapted to perform in the challenging context of developing country agriculture

Is a Friend in Need a Friend Indeed? Inclusion and Exclusion in Mutual Insurance Networks in Southern Ghana

Mutual insurance has been shown, theoretically and empirically, to be incomplete and limited by asymmetric information and lack of enforcement mechanisms. While some research has shown that networks based on kinship, neighborhood and ethnicity may provide a locus of insurance and thus a way of overcoming these problems, these studies are not fine enough to predict the inclusion and exclusion of individuals. Using data from rural Ghana, we examine the role of social relations in obtaining assistance in the face of shocks. We examine this at both the intra-household and community levels. At the household level, asking for and receiving assistance from the spouse is related to gender, the quality of the marital relationship, and the wealth of household members. At the community level, asking for and receiving help are correlated with membership in a major lineage, participation in secular organizations, the individual's fostering history, and anticipated land inheritance. We also show that these factors differ depending on whether the shortfall was for a household or personal item (as perceived by the respondent). This work helps us to identify individuals who are more likely to fall outside of mutual insurance networks and require interventions to help them cope with risk.Risk, social setworks, sutual insurance, intrahousehold allocation.

Cash transfer programs with income multipliers

Cash transfer programs induce multiplier effects when recipients put the money they receive to work to generate additional income. The ultimate income effects are multiples of the amounts transferred. This paper analyzes the PROCAMPO program in Mexico, which was introduced to compensate farmers for the anticipated negative effect of the North American Free Trade Agreement (NAFTA) on the price of basic crops. The transfer rules and the timing of the panel data collected allow unique control of biases in this impact analysis. We find that the multiplier among ejido sector recipients is in the range of 1.5 to 2.6. Multipliers are higher for medium and large farm households, low numbers of adults in the household, nonindigenous backgrounds, and households located in the Center and Gulf regions. High multipliers reflect marginal income opportunities that were unrealized due to liquidity constraints that the transfers eased. Opportunities came from the asset endowments that these households have, particularly irrigated land, and these opportunities were enhanced by access to technical assistance.Subsidies Mexico ,income ,

MEASURING THE INCOME GENERATING POTENTIAL OF LAND IN RURAL MEXICO

This paper measures the potential of land to generate income and establishes the contexts under which access to land can reduce poverty. Using Mexican household data, we apply nonparametric regression methods to estimate and graphically explore the relationship between land and welfare. Results suggest that the marginal value of land depends on both the complementary and contextual assets of the poor.Land Economics/Use,