Typology Of Farm Households And Irrigation Systems

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Typology of Farm Households and Irrigation Systems

Author : Hiroyuki Takeshima,Hyacinth Edeh
Publisher : Intl Food Policy Res Inst
Page : 36 pages
File Size : 49,8 Mb
Release : 2013-04-25
Category : Social Science
ISBN : 8210379456XXX

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Typology of Farm Households and Irrigation Systems by Hiroyuki Takeshima,Hyacinth Edeh Pdf

Irrigation is considered an important factor for agriculture and food security. Knowledge gaps, however, still exist with regard to how farmers in Africa south of Sahara, including Nigeria, are using irrigation. Given the diverse agroecological and socioeconomic environment in countries like Nigeria, understanding the diverse patterns of irrigation use and their associations with household characteristics is important in designing how irrigation can contribute to the agricultural transformation. This report summarizes the typology of farm households and irrigators in Nigeria. We apply a cluster analysis method to the Living Standard Measurement Survey (LSMS)—Integrated Survey on Agriculture data and various secondary data. We also compare the costs and inputs used across different irrigation crops, as reported in Nigeria. Findings indicate that the three major irrigation systems in Nigeria are (1) labor-intensive diverted stream irrigation of rice, (2) supplementary irrigation of coarse grains and legumes using groundwater, and (3) dry season irrigation of vegetables. Each crop is irrigated during a specific season and using a specific water source and irrigation system. Farmers’ choice of irrigation system tends to depend on many factors. For example, in the South, tractorization is often a necessary precondition for rice irrigation. In the North, intensive irrigation of rice and vegetables may make sense only if labor is cheap, whereas irrigation of sorghum and legumes is supplementary and may not affect farm households’ behaviors. Although more rigorous studies are needed in the future, observed patterns of irrigation use in Nigeria indicate that the policies aiming to raise agricultural productivity and to develop the value chains of key crops may need to be based on an understanding of why irrigation is used in specific ways in different systems and of what the key constraints in scaling up such systems in other locations are.

Group Lending with Heterogeneous Types

Author : Li Gan,Manuel A. Hernandez,Yanyan Liu
Publisher : Intl Food Policy Res Inst
Page : 44 pages
File Size : 48,6 Mb
Release : 2013-04-30
Category : Social Science
ISBN : 8210379456XXX

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Group Lending with Heterogeneous Types by Li Gan,Manuel A. Hernandez,Yanyan Liu Pdf

Group lending has been widely adopted in the past thirty years by many microfinance institutions as a means to mitigate information asymmetries when delivering credit to the poor. This paper proposes an empirical method to address the potential omitted-variable problem resulting from unobserved group types when modeling the repayment behavior of group members. We estimate the model using a rich dataset from a group-lending program in India. The estimation results support our model specification and show the advantages of relying on a type-varying method when analyzing the probability of default of group members. In particular, our model helps to better understand the factors driving repayment behavior, which may differ across group types, and shows a higher predictive power than standard single-agent choice models.

Farm households in Egypt: A typology for assessing vulnerability to climate change

Author : Nin-Pratt, Alejandro,ElDidi, Hagar,Breisinger, Clemens
Publisher : Intl Food Policy Res Inst
Page : 53 pages
File Size : 41,6 Mb
Release : 2018-09-06
Category : Political Science
ISBN : 8210379456XXX

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Farm households in Egypt: A typology for assessing vulnerability to climate change by Nin-Pratt, Alejandro,ElDidi, Hagar,Breisinger, Clemens Pdf

Using governorate-level national data and household survey data, we build a typology of farm households in Egypt that allows us to describe how different farm households behave in response to policy and environmental changes affecting their resources, welfare, and opportunities in output and input markets. One of the major contributions of this study is the building of a unique dataset that combines various data sources at different levels of aggregation, providing the information needed to model the farm typology. We used this dataset as the input of a multi-step procedure that includes the use of principal components and cluster analyses to identify 14 household types. To illustrate possible uses of the typology, we look at the vulnerability of the different types of households to projected changes in temperature, water availability, and water demand from crops due to climate change, and discuss which farmers, production systems, and regions will be most affected by climate shocks. We assumed that increased temperatures by 2050 would result in increased water demand and reduced yields for most crops due to heat stress and harsher growing conditions. We define three climate change scenarios that differ in the expected water flows of the Nile into the Aswan High Dam. Results of simulations using a household model suggest that Egypt is likely to experience a significant reduction in output, agricultural labor demand, and cultivated area because of climate change, although the severity of this outcome will depend on the magnitude of changes in the Nile’s flow. Most affected by these changes will be small and average households producing field crops. Our results suggest that to mitigate the risks and possible future impacts of climate change, the country will need to: Move away from policies supporting production of cereals and water-inefficient crops towards diversification of production into water-efficient high-value crops; facilitate the access of skilled resource-poor producers to capital and markets; and create opportunities for off-farm employment and income for smallholders that are using resources inefficiently.

Agriculture and Adaptation in Bangladesh

Author : Timothy S. Thomas,Khandaker Mainuddin,Catherine Chiang,Aminur Rahman,Anwarul Haque,Nazria Islam,Saad Quasem,Yan Sun
Publisher : Intl Food Policy Res Inst
Page : 76 pages
File Size : 44,8 Mb
Release : 2013-07-29
Category : Social Science
ISBN : 8210379456XXX

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Agriculture and Adaptation in Bangladesh by Timothy S. Thomas,Khandaker Mainuddin,Catherine Chiang,Aminur Rahman,Anwarul Haque,Nazria Islam,Saad Quasem,Yan Sun Pdf

Bangladesh is extremely vulnerable to the impact of climate change because it is a low-lying, flat country subject to both riverine flooding and sea level rise, and because a large portion of its population is dependent on agriculture for its livelihood. The goal of this research was to examine the likely impacts of climate change on agriculture in Bangladesh, and develop recommendations to policymakers to help farmers adapt to the changes. In this study, we use climate data from four general circulation models (GCMs) to evaluate the impact of climate change on agriculture in Bangladesh by 2050. We use the DSSAT (Decision Support System for Agrotechnology Transfer) crop modeling software to evaluate crop yields, first for the 1950 to 2000 period (actual climate) and then for the climates given by the four GCMs for 2050. We evaluate crop yields at 1,789 different points in Bangladesh, using a grid composed of roughly 10 kilometer (km) squares, for 8 different crops in 2000 and 2050. For each crop, we search for the best cultivar (variety) at each square, rather than limiting our analysis to a single variety for all locations. We also search for the best planting month in each square. In addition, we explore potential gains in changing fertilizer levels and in using irrigation to compensate for rainfall changes. This analysis indicates that when practiced together, using cultivars better suited for climate change and adjusting planting dates can lessen the impacts of climate change on yields, especially for rice, and in some cases actually result in higher yields. In addition, the analysis shows that losses in yield due to climate change can be compensated for, for many crops, by increasing the availability of nitrogen in the soil. Moreover, we used a household survey to collect information on the incidence of climatic shocks in the last five years and adaptation options. The survey was conducted from December 2010 to February 2011, covering data from the previous production year. The results confirm that Bangladesh farmers already perceive the impacts of climate change. In particular, the survey results indicate that of all climate change–related shocks, floods, waterlogging, and river erosion caused the largest loss to rice production. Farmers in our survey lost around 12 percent of their harvest, on average, to some kind of shock, with about half of that attributable to flooding-related issues. The second leading cause of rice crop loss was pests, responsible for around 3 percent of production. Taken together, the results indicate that adaptation efforts in Bangladesh should include adjusting planting dates, using improved cultivars better suited for climate change, improving fertilizer application, exploring increased maize production, and bolstering flood and pest protection for farmers.

Targeting Technology to Reduce Poverty and Conserve Resources

Author : Travis J. Lybbert,Nicholas Magnan,David J. Spielman,Anil Bhargava,Kajal Gulati
Publisher : Intl Food Policy Res Inst
Page : 44 pages
File Size : 55,5 Mb
Release : 2013-07-02
Category : Social Science
ISBN : 8210379456XXX

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Targeting Technology to Reduce Poverty and Conserve Resources by Travis J. Lybbert,Nicholas Magnan,David J. Spielman,Anil Bhargava,Kajal Gulati Pdf

Demand heterogeneity often makes it profitable for firms to price and promote goods and services differently in different market segments. When private consumption brings public benefits, this same heterogeneity can be used to target public subsidies. We explore the design of public–private targeting and segmentation strategies in the case of a resource-conserving agricultural technology in India. To understand farmers’ heterogeneous demand for laser land leveling (LLL), we conducted an experimental auction for LLL services with an integrated randomized controlled trial to estimate the private benefits of the technology. We use graphical and econometric approaches to characterize farmer demand for LLL. We then add detailed cost data from LLL providers to simulate and evaluate several potential targeted delivery strategies based on measures of (1) the cost-effectiveness of expanding LLL dissemination, (2) water savings, and (3) market surplus in a welfare framework. These simulations demonstrate inherent tradeoffs between increasing the amount of land that is leveled and expanding the number of farmers who adopt the technology, and between adoption and water savings. While segmenting and targeting are popular elements of many public–private partnerships to develop and disseminate agricultural technologies, formulating and implementing effective delivery strategies requires a rich understanding of costs, benefits, and demand. Our experimental approach generates such an understanding and may be relevant in other contexts.

Comprehensive Food Security and Vulnerability Analysis

Author : Oluyemisi Kuku-Shittu,Astrid Mathiassen,Amit Wadhwa,Lucy Myles,Akeem Ajibola
Publisher : Intl Food Policy Res Inst
Page : 44 pages
File Size : 55,9 Mb
Release : 2013-07-30
Category : Social Science
ISBN : 8210379456XXX

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Comprehensive Food Security and Vulnerability Analysis by Oluyemisi Kuku-Shittu,Astrid Mathiassen,Amit Wadhwa,Lucy Myles,Akeem Ajibola Pdf

The Nigerian Comprehensive Food Security and Vulnerability Analysis (CFSVA) provides an in-depth assessment of the food security situation within Nigeria. This is very important as it equips policymakers with timely and relevant information that will aid the targeting of interventions. Some of the most pertinent findings of the study are listed below: • Food insecurity and poverty are intricately linked. Some 29 percent of households in the poorest wealth quintiles have unacceptable diets (9 percent poor and 20 percent borderline) compared with 15 percent in the wealthiest (2 percent poor and 13 percent borderline). • The poorest livelihoods are found in agriculture. Seventy-seven percent of subsistence farmers are found in the two poorest wealth quintiles, as are 70 percent of mixed or cash crop farmers. • The general state of water and sanitation facilities available to households in all wealth categories is very poor, with consequent health implications. Forty-five percent of respondents do not have access to decent toilets, and 85 percent have no proper means of refuse disposal. • The vulnerable and food insecure are mostly found in rural areas and the North West and North East regions of Nigeria. • Most households in all regions and at all wealth levels purchase food, but rural households and poorer households (by wealth and livelihood) also rely heavily on own food production. Households in the poorest quintiles in both rural and urban areas rely on own production (32 percent rural and 24 percent urban). Wealthier urban households rely mostly on purchases, whereas own production is common at varying levels across all wealth levels for rural households. • Nigerians generally consume a starchy diet, but wealthier households can afford more nutrient-rich foods (including animal-based proteins) than poorer households. For instance, the wealthiest households consume meat, fish, and eggs an average of four days a week compared with only two days for the poorest households. • Most households protect vulnerable household members in terms of food allocations (women and children), but that may not hold in the poorest households where some difficult allocation decisions may have to be made. • Poorer households are more likely to engage in extreme coping strategies (like going a whole day without food) to deal with food shortages.

Local Warming and Violent Conflict in North and South Sudan

Author : Margherita Calderone,Jean-Francois Maystadt,Liangzhi You
Publisher : Intl Food Policy Res Inst
Page : 78 pages
File Size : 40,7 Mb
Release : 2013-07-15
Category : Social Science
ISBN : 8210379456XXX

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Local Warming and Violent Conflict in North and South Sudan by Margherita Calderone,Jean-Francois Maystadt,Liangzhi You Pdf

Weather shocks and natural disasters, it has been argued, represent a major threat to national and international security. Our paper contributes to the emerging micro-level strand of the literature on the link between local variations in weather shocks and conflict by focusing on a pixel-level analysis for North and South Sudan at different geographical and time scales between 1997 and 2009. Temperature anomalies are found to strongly affect the risk of conflict. In the future the risk is expected to magnify in a range of 21 to 30 percent under a median scenario, taking into account uncertainties in both the climate projection and the estimate of the response of violence to temperature variations. Extreme temperature shocks are found to strongly affect the likelihood of violence as well, but the predictive power is hindered by substantial uncertainty. Our paper also sheds light on the vulnerability of areas with particular biophysical characteristics or with vulnerable populations.

Irrigated Agriculture in Egypt

Author : Masayoshi Satoh,Samir Aboulroos
Publisher : Springer
Page : 290 pages
File Size : 53,9 Mb
Release : 2017-03-07
Category : Technology & Engineering
ISBN : 9783319302164

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Irrigated Agriculture in Egypt by Masayoshi Satoh,Samir Aboulroos Pdf

This book targets the issue of water scarcity in Egypt as a typical example of the world water crisis. Today, the available water resource is facing its limit because of rapid increase in water demand as a result of population growth and changes in peoples’ life-style. The basic idea to solve the problem of water scarcity is that the irrigation sector, the biggest user of water, should increase water use efficiency. However, the real problem is how this can be achieved in view of the crucial need for water in this sector. This book addresses this challenge through case studies from the Nile delta in Egypt. The water problem in the Nile delta, the major source for water in Egypt, is discussed in this book from all its various aspects. This book covers the situation before and after the advent of the Aswan High Dam, so that the reader understands the entire development. Another special feature are the extensive and scientific descriptions of contemporary topics in water and agriculture, especially from the viewpoint of water saving and sustainability. These descriptions are based on field experiments and surveys in a six-year international research project. Topics of this book are local, but their implications are global.

Reverse-Share-Tenancy and Marshallian Inefficiency

Author : Hosaena Ghebru Hagos,Stein T. Holden
Publisher : Intl Food Policy Res Inst
Page : 48 pages
File Size : 54,5 Mb
Release : 2013-05-17
Category : Social Science
ISBN : 8210379456XXX

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Reverse-Share-Tenancy and Marshallian Inefficiency by Hosaena Ghebru Hagos,Stein T. Holden Pdf

While there are ample empirical studies that claim the potential disincentive effects of sharecropping arrangements, the existing literature is shallow in explaining why share tenancy contracts are prevalent and diffusing in many developing countries. Using a unique tenant-landlord matched dataset from the Tigray region of Ethiopia, we are able to show how the tenants’ strategic response to the varying economic and tenure-security status of the landlords can explain sharecroppers’ productivity differentials. To the best of our knowledge, this is the first study to use tenant–landlord matched data that accounts for both the supply (landlord) and demand (tenant) side characteristics in analyzing sharecroppers’ level of effort and productivity. The study reveals that sharecroppers’ yields are significantly lower on plots leased from landlords who are non-kin, who are female, who have lower income-generating opportunity, and who are tenure insecure than on plots leased from landlords with the opposite characteristics. While, on aggregate, the results show no significant efficiency loss on kin-operated sharecropped plots, more decomposed analyses indicate strong evidence of Marshallian inefficiency on kin-operated plots leased from landlords with weaker bargaining power and higher tenure insecurity. This study thus shows how failure to control for the heterogeneity of landowners’ characteristics can explain the lack of clarity in the existing empirical literature on the extent of moral hazard problems in sharecropping contracts.

Dynamics of Transformation

Author : Hiroyuki Takeshima,Kipo Jimah,Shashidhara Kolavalli,Xinshen Diao,Rebecca Lee Funk
Publisher : Intl Food Policy Res Inst
Page : 36 pages
File Size : 55,9 Mb
Release : 2013-06-21
Category : Social Science
ISBN : 8210379456XXX

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Dynamics of Transformation by Hiroyuki Takeshima,Kipo Jimah,Shashidhara Kolavalli,Xinshen Diao,Rebecca Lee Funk Pdf

Agriculture in African South of the Sahara (SSA) can be transformed if the right public support is provided at the initial stage, and it can sustain itself once the enabling environment is put in place. Successes are also specific to the location of projects. In Ghana, interesting insights are obtained from the successful Kpong Irrigation Project (KIP), contrasted with other major irrigation projects in the country. Through an exploratory review, we describe how a productive system evolved in KIP and how public support for critical aspects (accumulation of crop husbandry knowledge, selection and supply of profitable varieties, and mechanization of land preparation) might have created a productive environment that the private sector could enter and fill in the market for credit, processing, mechanization of harvesting, and other institutional voids that typically have constrained agricultural transformation in the rest of SSA. Slower progress in other projects also raises a number of questions. We conclude by summarizing those questions and some testable hypotheses for future research.

An Ex Ante Analysis of the Impact and Cost-Effectiveness of Biofortified High-Provitamin A and High-Iron Banana in Uganda

Author : John L. Fiedler,Enoch M. Kikulwe,Ekin Birol
Publisher : Intl Food Policy Res Inst
Page : 44 pages
File Size : 41,5 Mb
Release : 2013-07-16
Category : Social Science
ISBN : 8210379456XXX

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An Ex Ante Analysis of the Impact and Cost-Effectiveness of Biofortified High-Provitamin A and High-Iron Banana in Uganda by John L. Fiedler,Enoch M. Kikulwe,Ekin Birol Pdf

Uganda has made notable progress in reducing micronutrient deficiencies in recent years, but the prevalence of vitamin A deficiency (VAD) and anemia among children under 5 remain unacceptably high. According to World Health Organization criteria, VAD remains a public health problem in Uganda, and anemia is a severe problem. In this paper we explore the potential contribution to reducing both of these deficiencies using a genetically modified, high–provitamin A and high-iron banana (HPVAHIB) that is currently being developed. We present an ex ante analysis of the costs and nutritional benefits of HPVAHIB. Using the Ugandan National Household Survey of 2005/06, we analyzed the production and consumption patterns of highland cooking banana (nakinyika) and sweet banana (sukalindizi). Informed by the empirical findings, we developed geographically differentiated adoption, production, consumption, and diffusion patterns for several types of HPVAHIB. Based on households’ reported quantities of each type of banana currently consumed, we estimated the number of people consuming each banana and the quantities they consume, and then simulated the additional intakes of vitamin A and iron and estimated the number of disability-adjusted life years (DALYs) saved attributable to each. Combining the health impacts with the estimated costs of the project, three impact measures of the HPVAHIB are developed: the cost per DALY saved, the benefit–cost ratio, and the internal rate of return. Eighteen scenarios are estimated. The base scenario, which includes only the biofortification of cooking banana with provitamin A at a level equal to 400 percent its intrinsic provitamin A content, estimates that the net present cost per DALY saved of HPVAHIB is US$62, its benefit–cost ratio is 16, and its internal rate of return is 31 percent. According to criteria established by the World Health Organization and the World Bank, the HPVAHIB project is a “very cost-effective” health intervention.

The Impact of Alternative Input Subsidy Exit Strategies on Malawi’s Maize Commodity Market

Author : Mariam A. T. J. Mapila
Publisher : Intl Food Policy Res Inst
Page : 32 pages
File Size : 41,7 Mb
Release : 2013-07-16
Category : Social Science
ISBN : 8210379456XXX

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The Impact of Alternative Input Subsidy Exit Strategies on Malawi’s Maize Commodity Market by Mariam A. T. J. Mapila Pdf

This study has been conducted in order to generate evidence of the visibility of exit from farm input subsidies in an African context. The study simulates the impact of alternative exit strategies from Malawi’s farm input subsidy program on maize markets. The simulation is conducted using a multiequation partial equilibrium model of the national maize market, which is sequentially linked via a price-linkage equation to local rural maize markets. The model accounts for market imperfections prevailing in the country that arise from government price interventions. Findings show that some alternative exit strategies have negative and sustained impacts on maize yields, production, and acreage allocated to maize over the simulation period. Market prices rise steadily as a result of the implementation of different exit strategies. Despite higher maize prices, domestic maize consumption remains fairly stable, with a slow but increasing trend over the simulation period. Results further suggest that exit strategies that are coupled with improvements in agricultural extension services have the potential to offset the negative impacts of the removal or scaling down of agricultural input subsidies. The study findings demonstrate the difficulty of feasibly removing farm input subsidies. Study recommendations are therefore relevant for policymakers and development partners debating removal or implementation of farm input subsidies.

The Logic of Adaptive Sequential Experimentation in Policy Design

Author : Haipeng Xing,Xiaobo Zhang
Publisher : Intl Food Policy Res Inst
Page : 28 pages
File Size : 43,9 Mb
Release : 2013-06-26
Category : Social Science
ISBN : 8210379456XXX

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The Logic of Adaptive Sequential Experimentation in Policy Design by Haipeng Xing,Xiaobo Zhang Pdf

Inspired by the wide adoption of rigorous randomized controlled trials (RCTs) in medical research, economists and other social scientists have increasingly used RCTs in their research. As researchers pick up projects amenable to the RCT methodology, they likely leave out important questions to which RCTs cannot be directly applied. As a result, RCTs have been criticized for the proclivity of addressing trivial questions. As a matter of fact, in medical research RCTs are an integral part of adaptive sequential experiment design—a few steps must be taken to screen out drugs that have toxins and strong side effects before running any RCTs on humans. In this paper, we argue that economists can learn a great deal from the design principles implemented in medical research. We develop a theoretical model to show the logic of adaptive sequential experiment design in the presence of uncertainty over negative effects and discuss how to choose samples in a population to minimize the experiment cost. We also point out the applications of our proposed framework in the economic domain, such as economic reforms and new product design.

Organizational and Institutional Issues in Climate Change Adaptation and Risk Management

Author : Catherine Ragasa,Yan Sun,Elizabeth Bryan,Caroline Abate,Atlaw Alemu,Mahamadou Namori Keita
Publisher : Intl Food Policy Res Inst
Page : 64 pages
File Size : 41,7 Mb
Release : 2013-07-17
Category : Social Science
ISBN : 8210379456XXX

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Organizational and Institutional Issues in Climate Change Adaptation and Risk Management by Catherine Ragasa,Yan Sun,Elizabeth Bryan,Caroline Abate,Atlaw Alemu,Mahamadou Namori Keita Pdf

Climate change places demand on existing governance structures to reform and work more effectively than in the past. In response, greater attention to and funding for climate change adaptation—including the efforts of National Adaptation Programmes of Action (NAPAs), the Least Developed Country Fund, the Special Climate Change Fund, the Adaptation Fund, and the E.U. Global Climate Change Alliance—provide an opportunity for institutional, organizational, and human-capacity strengthening. This study was conducted to explore the challenges and opportunities for building human, organizational, and institutional capacity for more effective climate change adaptation in developing countries. It is part of a larger research project titled “Enhancing Women’s Assets to Manage Risk under Climate Change: Potential for Group-Based Approaches,” which is being conducted to help organizations better understand ways in which development projects can assist rural households in adapting to and managing the effects of climate change. This report provides some reflections and insights on the level of awareness, practices, and organizational and institutional issues being faced by countries as they adapt to climate change, based on interviews with 87 practitioners working in government agencies, local organizations, international organizations, and think thanks reporting involvement in climate change adaptation. Data were collected in Bangladesh, Ethiopia, Kenya, and Mali using both an e-survey platform and face-to-face interviews. Responses reveal active work within these organizations on climate change adaptation and emphasize their important role in the countries’ efforts to address and adapt to climate change. Responses also reveal strong awareness among these organizations of different aspects of climate change adaptation along the different stages in a climate change adaptation project cycle, which may be a reflection of the active discussions and awareness campaigns during NAPA development in these countries. However, despite the awareness and presence of national strategies and action plans, there seem to be no explicit and clearly defined policy and strategy within these organizations outlining their role in and contribution to the national and collective efforts and, more importantly, no explicit and measurable targets and monitoring and evaluation (M&E) system to track progress and outcomes over time. Reported capacity gaps can be grouped into two categories: training needs and institutional challenges. In many organizations, there is limited awareness of and emphasis on the need for participation of target groups and beneficiaries during design and planning of climate change adaptation projects. In addition, many respondents reported a need for greater attention to issues related to profitability, financial sustainability, and market access from climate change project design to M&E. Finally, respondents emphasized that climate change projects should pay greater attention to gender, social, political, and cultural issues in their design and implementation. Reflections of respondents also highlighted the need for organizational capacity strengthening for those local organizations working in and providing services to rural communities, and for promoting a culture of impact and M&E within these organizations, in addition to the reported training needs in climate change management and in gender and social analysis. While this report provides some insights, further empirical analyses are needed to discover more details on strategies that could help trigger mind-set and organizational culture change and to capture the complexity of organizational and institutional issues hindering climate change adaptation efforts that aim at reducing vulnerability and contributing to development outcomes.

Demand for Weather Hedges in India

Author : Ruth Vargas Hill,Miguel Robles,Francisco Ceballos
Publisher : Intl Food Policy Res Inst
Page : 33 pages
File Size : 47,6 Mb
Release : 2013-07-23
Category : Social Science
ISBN : 8210379456XXX

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Demand for Weather Hedges in India by Ruth Vargas Hill,Miguel Robles,Francisco Ceballos Pdf

Income risk is substantial for farmers in developing countries. Formal insurance markets for this risk are poorly developed, and as a result there has been an increasing trend to sell weather hedges to smallholder farmers to manage their risk. This paper analyzes the demand for rainfall-based weather hedges among farmers in rural India. We explore the predictions of a standard expected utility theory framework on the nature of demand for such products, in particular testing whether demand behaves as predicted with respect to price, the basis of the hedge, and risk aversion using data from a randomized control trial in which price and basis risk was varied for a series of hedging products offered to farmers. We find that demand behaves as predicted, with demand falling with price and basis risk, and appearing hump-shaped in risk aversion. Second, we analyze understanding of and demand for hedging products over time, examining the impact of increased investments in training on hedging products as well as evidence for learning by doing among farmers. We find evidence that suggests that learning by doing is more effective at increasing both understanding and demand.