"Dabalen, Paternostro, and Pierre investigate the differences in outcomes (earnings and consumption) between individuals (households) who participate in the nonfarm sector and those who do not. They use propensity score matching methods where they create appropriate comparison groups of individuals and households. First the authors find that nonfarm self-employed individuals in rural Rwanda have significantly higher earnings than farm workers and nonfarm formal employees. Second, they show that the benefits to nonfarm self-employment are much higher among the nonpoor than among the poor. Third, the authors show that diversified households-- those with a farm and a nonfarm enterprise-- are less likely to be poor. Finally, farm households who do not participate in the market have significantly lower consumption levels than households that do. However, the benefits to market participation appear to matter less for the poor than for the nonpoor. The authors find little difference in expenditures between market participants and nonmarket participants for comparable households in the bottom 40 percent of the expenditure distribution. This paper-- a product of the Poverty Reduction Group, Poverty Reduction and Economic Management Network-- is part of a larger effort in the network to understand rural nonfarm employment determinants"-- World Bank web site.
"Dabalen, Paternostro, and Pierre investigate the differences in outcomes (earnings and consumption) between individuals (households) who participate in the nonfarm sector and those who do not. They use propensity score matching methods where they create appropriate comparison groups of individuals and households. First the authors find that nonfarm self-employed individuals in rural Rwanda have significantly higher earnings than farm workers and nonfarm formal employees. Second, they show that the benefits to nonfarm self-employment are much higher among the nonpoor than among the poor. Third, the authors show that diversified households-- those with a farm and a nonfarm enterprise-- are less likely to be poor. Finally, farm households who do not participate in the market have significantly lower consumption levels than households that do. However, the benefits to market participation appear to matter less for the poor than for the nonpoor. The authors find little difference in expenditures between market participants and nonmarket participants for comparable households in the bottom 40 percent of the expenditure distribution. This paper-- a product of the Poverty Reduction Group, Poverty Reduction and Economic Management Network-- is part of a larger effort in the network to understand rural nonfarm employment determinants"-- World Bank web site.
In this paper, we investigate the differences in outcomes (earnings and consumption) between individuals (households) who participate in the non-farm sector and those who do not. We use propensity score matching methods, where we create appropriate comparison groups of individuals and households. First we find that non-farm self-employed individuals in rural Rwanda have significantly higher earnings than farm workers and non-farm formal employees. Second, we show that the benefits to non-farm self-employment are much higher among the non-poor than among the poor. Third, we show that diversified households, those with a farm and a non-farm enterprise, are less likely to be poor. Finally, farm households who do not participate in the market have significantly lower consumption levels than households that do. However, the benefits to market participation appear to matter less for the poor than for the non-poor. We find little difference in expenditures between market participants and non-market participants, for comparable households in the bottom 40% of the expenditure distribution.
Although the potentially negative impacts of credit constraints on economic development have long been discussed conceptually, empirical evidence for Africa remains limited. This study uses a direct elicitation approach for a national sample of Rwandan rural households to assess empirically the extent and nature of credit rationing in the semi-formal sector and its impact using an endogenous sample separation between credit-constrained and unconstrained households. Being credit constrained reduces the likelihood of participating in off-farm self-employment activities by about 6.3 percent while making participation in low-return farm wage labor more likely. Even within agriculture, elimination of all types of credit constraints in the semi-formal sector could increase output by some 17 percent. Two suggestions for policy emerge from the findings. First, the estimates suggest that access to information (education, listening to the radio, and membership in a farm cooperative) has a major impact on reducing the incidence of credit constraints in the semi-formal credit sector. Expanding access to information in rural areas thus seems to be one of the most promising strategies to improve credit access in the short term. Second, making it easy to identify land owners and transfer land could also significantly reduce transaction costs associated with credit access.
Contrary to conventional wisdom that equates rural economies with agriculture, rural residents in developing countries often rely heavily on activities other than farming for their income. Indeed, nonfarm work accounts for between one-third and one-half of rural incomes in the developing world. In recent years, accelerating globalization, increasing competition from large businesses, expanding urban markets for rural goods and services, and greater availability of information and communication technology have combined to expose rural nonfarm businesses to new opportunities as well as new risks. By examining these rapid changes in the rural nonfarm economy, international experts explore how the rural nonfarm economy can contribute to overall economic growth in developing countries and how the poor can participate in this rapidly evolving segment of the economy. The authors review an array of recent studies of the rural nonfarm economy in order to summarize existing empirical evidence, explore policy implications, and identify future research priorities. They examine the varied scale, structure, and composition of the rural nonfarm economy, as well as its relationship with agricultural and urban enterprises. And they address key questions about the role of public intervention in the rural nonfarm economy and how the rural poor can participate in and navigate the rapid transition underway in rural areas. The contributors offer new insights to specialists in rural development and to others interested in overall economic development.
A joint FAO and World Bank study which shows how the farming systems approach can be used to identify priorities for the reduction of hunger and poverty in the main farming systems of the six major developing regions of the world.
For Rwanda, one of the poorest countries in the world, trade offers the most effective route for substantial poverty reduction. But the poor in Rwanda, most of whom are subsistence farmers in rural areas, are currently disconnected from markets and commercial activities by extremely high transport costs and by severe constraints on their ability to shift out of subsistence farming. The constraints include lack of access to credit and lack of access to information on the skills and techniques required to produce commercial crops. The paper is based on information from the household survey and a recent diagnostic study of constraints to trade in Rwanda. It provides a number of indicative simulations that show the potential for substantial reductions in poverty from initiatives that reduce trade costs, enhance the quality of exportable goods, and facilitate movement out of subsistence into commercial activities.
This study used cross sectional data from the government of Malawi’s Farm Income Diversification Programme (FIDP) to examine the impact of FIDP on household welfare. Total annual household income, food security, and the wealth status of households were used as measures of household welfare. A propensity score matching procedure was used to make statistically valid comparisons between the welfare of households which participated and did not participate in FIDP. The results show that households which participated in FIDP had higher incomes and their food security status improved more than among similar households which did not participate in the program. The results further reveal that FIDP improved the wealth of participating households compared to their counterparts who did not participate. Those FIDP participating households engaged in livestock production, in particular, experienced considerable growth of income, which suggests that livestock enterprises coupled with income from crops could be an important pathway for improving the wellbeing of households in Malawi.
This pocket-sized reference on key environmental data for over 200 countries includes key indicators on agriculture, forestry, biodiversity, energy, emission and pollution, and water and sanitation. The volume helps establish a sound base of information to help set priorities and measure progress toward environmental sustainability goals.
The Innovation for Agribusiness (InovAgro) project, which launched with its first three year phase in 2010, uses a market system development (MSD) approach towards the goal of increasing incomes of men and women small-scale farmers in northern Mozambique. InovAgro interventions promote improved agricultural productivity, participation in selected high-potential value chains and the development of inclusive and sustainable market systems, such that impacts are expected to last long beyond the termination of the project. This paper presents results from a midline quantitative impact evaluation of the second phase of the InovAgro project interventions (2014-2017). In it, we use a carefully designed and executed quasi-experimental study design to credibly attribute changes in market engagement and welfare of participating farmers to exposure to the InovAgro II project, identifying and testing in what respects the intervention was most successful, and what regard it had less impact. Although InovAgro II projects operate in 11 districts of Zambézia and Cabo Delgado provinces, this impact evaluation focuses on two districts in Zambézia province (Alto Molócue and Molumbo), and in terms of value chains, focuses on the soybean and pigeon pea high-potential value chains, while the InovAgro II project interventions focus on these in addition to maize, sesame and groundnut. A baseline survey was undertaken in 2015 covering the 2014/2015 agricultural season and a midline follow-up survey was conducted in 2017, covering the 2016/2017 agricultural season and reaching 1,749 households of the original 1,886 households interviewed in the baseline survey. Using difference-in-difference estimation and propensity score matching, we find that exposure to the InovAgro II project is associated with an increase in the proportion of households selling soybean and pigeon pea by approximately 5% and 16%, respectively (significant at the .01 level). Exposure to the InovAgro II project also results in significantly higher shares of smallholder farmers using improved seed for soybean and pigeon pea (an increase of 6% for soybean and 2% for pigeon pea). We find that the InovAgro II project is also associated with significant increases in access to agricultural output market information from formal sources (5%) and hired labor for farming activities (8%). Despite the significant impacts on short term outcome variables, exposure to the InovAgro II project had limited impact on long term outcome variables, such as on rural-urban migration as well as engagement in the non-farm sector (two proxies for assessing potential welfare implications of the project) however this finding is not surprising given the impact evaluation covers only two years-a short period of time to bring about the long-term impacts expected to eventually emanate from an MSD project.
