Asset versus consumption poverty and poverty dynamics in the presence of multiple equilibria in rural Ethiopia

Effective poverty reduction programs require careful measurement of poverty status. Several studies have shown conceptually that assets reflecting productive capacity form a more robust basis for identifying the poor than do flow variables such as expenditures or income. Nonetheless, little work has empirically compared poverty measurements based on assets and expenditures. This paper uses panel data from Ethiopia to generate an asset-based poverty classification scheme. Regression results are used to estimate an asset index and classify households into categories of structural poverty. Asset index dynamics are also explored to test for the existence of multiple asset index equilibria; evidence of potential poverty traps. Results provide evidence of multiple equilibria in the study sample as a whole as well as convergence at different levels over space, depending on commercialization opportunities and agroecological factors. The asset-based poverty classifications consistently predict future poverty status more accurately than do income-based measures, confirming that the asset-based measure could be used to more carefully target poverty interventions in rural areas and to more accurately assess the impact of those interventions.asset index, asset poverty, Commercialization, expenditures, income-based measures, index equilibria, Poverty dynamics, Poverty reduction, regression,

Medium-Scale Farming as a Policy Tool for Agricultural Commercialisation and Small-Scale Farms Transformation in Nigeria

Recent evidence suggests that the changing structure of land ownership in sub-Saharan Africa is one of the major new trends affecting African agri-food systems. Research in several African countries shows a rapid rise of medium-scale farms (MSFs) of 5–50ha. MSFs have become an important force for increasing agricultural production, particularly in countries with significant unutilised arable land and potential for area expansion, such as Ghana, Nigeria, Tanzania and Zambia. Most African countries’ national agricultural investment plans and policy strategies officially regard the smallholder farming sector as the main vehicle for achieving agricultural growth, food security, and poverty reduction objectives. However, many governments have adopted land and financial policies that implicitly encourage the rise of emergent MSFs. Given the documented rise in MSFs in many African countries, the APRA Nigeria Work Stream 1 team developed a research agenda focused on understanding the potentially complex ways in which these farms affect the productivity and commercialisation potential of small-scale farms (SSFs). We investigated the characteristics of MSFs, the processes that produces them, their relative importance in the agricultural commercialisation process, the relationship between farm scale and productivity, and whether MSFs influence the behaviour and welfare of the millions of SSF households around them. Our findings are based on two years of survey data on MSFs and nearby SSFs in 2019 and 2021 in Ogun and Kaduna states. This policy brief summarises our main findings, drawing upon several APRA-supported reports

The processed food revolution in African food systems and the double burden of malnutrition

African consumers have purchased increasing amounts of processed food over the past 50 years. The opportunity cost of time of women and men has increased as more of them work outside the home, driving them to buy processed food and food prepared away from home to save arduous home-processing and preparation labor. In the past several decades, this trend has accelerated with a surge on the supply side of the processing sector and small and medium enterprises (SMEs) and large private companies making massive aggregate investments. Packaged, industrialized, ultra-processed foods and sugar-sweetened beverages (SSBs) are a growing proportion of the processed food consumed. Also, in the past several decades, overweight and obesity have joined the longstanding high levels of stunting and wasting among children and extreme thinness among women of childbearing age. Together these phenomena have formed a double burden of malnutrition (DBM). The DBM has emerged as an important health problem in sub-Saharan Africa. The rise of the DBM and the increase in ultra-processed food consumption are linked. Policy makers face a dilemma. On the one hand, purchases of processed food are driven by long-term factors, such as urbanization, increased income, and employment changes, and thus policy cannot change the pursuit of convenience and labor-saving food. Moreover, much processed food, like packaged milk, is a boon to nutrition, and the processed food system is a major source of jobs for women. On the other hand, the portion (some 10–30%) of processed food that is ultra-processed is a public health challenge, and policy must address its detrimental effects on disease burden. The global experience suggests that double duty actions are most important as are selected policies focused on healthy weaning foods for addressing stunting and taxes on SSBs, nutrition labeling, and other measures can steer consumers away from unhealthy ultra-processed foods to addressing obesity and possibly child nutrition and stunting. We recommend that African governments consider these policy options, but note that the current extreme fragmentation of the processing sector, consisting of vast numbers of informal SMEs in sub-Saharan Africa, and the limited administrative/implementation capacity of many African governments require pursuing this path only gradually

Farmer groups and input access: When membership is not enough

This paper uses a double hurdle model to explore whether different methods of distributing fertilizer through groups in a targeted input subsidy program affects an intervention’s ability to increase farmer access to agricultural inputs. It uses a case study of Nigeria to demonstrate this. Farmer group membership was required for participating in a voucher program in Nigeria in 2009. However, for actual fertilizer distribution among participants, individual farmers were given their allotted share directly for one set of farmers while for the other set; the fertilizer was given indirectly through a group representative. Where fertilizer was given to a group representative for further distribution to members, respondents with close links to their farm group president received more bags of fertilizer than those without. Where fertilizer was given directly to farmers such results did not obtain. This differential outcome suggests that while groups may facilitate the process of farmer identification and coordination, intra group dynamics may affect their efficacy for providing equal access to inputs for members. A double hurdle model enables us to model the potentially separate processes that determine participation in the voucher program and one’s experience, upon deciding to participate. With intentions to adopt and scale up voucher programs in various food security and poverty alleviation programs across developing countries, it is important to understand the role that intra group dynamics play in the successful implementation of such programs

Poverty status and the impact of social networks on smallholder technology adoption in rural Ethiopia

Despite the promise of many new farm technologies, technology adoption rates in Ethiopia remain low. This paper studies the impact of social networks on technology adoption through social learning. In addition to geographic networks, intentional relationships are considered. The differential impacts by network type, technology, and asset poverty status are explored. We find evidence that although social learning occurs, it is more consistent for households not in poverty traps than for those that are persistently asset poor. Social learning among rural households is stronger for more complex technologies and is associated with intentional relationships rather than with geographic networks.Non-PRIFPRI1; GRP32DSG

Asset versus consumption poverty and poverty dynamics in the presence of multiple equilibria in rural Ethiopia

Effective poverty reduction programs require careful measurement of poverty status. Several studies have shown conceptually that assets reflecting productive capacity form a more robust basis for identifying the poor than do flow variables such as expenditures or income. Nonetheless, little work has empirically compared poverty measurements based on assets and expenditures. This paper uses panel data from Ethiopia to generate an asset-based poverty classification scheme. Regression results are used to estimate an asset index and classify households into categories of structural poverty. Asset index dynamics are also explored to test for the existence of multiple asset index equilibria; evidence of potential poverty traps. Results provide evidence of multiple equilibria in the study sample as a whole as well as convergence at different levels over space, depending on commercialization opportunities and agroecological factors. The asset-based poverty classifications consistently predict future poverty status more accurately than do income-based measures, confirming that the asset-based measure could be used to more carefully target poverty interventions in rural areas and to more accurately assess the impact of those interventions.Non-PRIFPRI1; GRP32DSG

Enhancing the competitiveness of agricultural commodity chains in Nigeria

Nigeria's economic performance since 2002 has improved, with growth averaging about 7.3 percent during 2002-07 (Global insight 2008). While the production of cassava, rice, and maize has responded to the associated improved policy incentives in recent years, factors such as poor infrastructure and limited market outlets have served as great disincentives to farmers. Using household data in a "Policy Analysis Matrix" (PAM) framework, the comparative advantage of Nigerian farmers in producing cassava, rice, and maize in high potential states, given current national policies, is examined.Non-PRIFPRI1; GRP32; NSSPDSG

Poverty status and the impact of formal credit on technology use and wellbeing among Ethiopian smallholders

PRIFPRI3; ISIDSG