the impacts of a jatropha plantation on food security and income of rural households in madagascar...

The impacts of a Jatropha plantation on food security and income of rural households in

Madagascar – A panel data analysis

Paper prepared for presentation at the 16th ICABR Conference – 128th EAAE Seminar

“THE POLITICAL ECONOMY OF THE BIOECONOMY: BIOTECHNOLOGY AND BIOFUEL”

Ravello, Italy, June 24-27, 2012

Authors: Christine Bosch and Manfred Zeller, University of Hohenheim

Table of contents

1. Research questions and objectives

2. Methods

3. Results

4. Discussion and conclusion

Source: JatroSolutions 2011

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Research questions and objectives Did plantation incomes contribute to poverty alleviation?

Did the additional income improve food security and diet diversity?

Is income inequality declining?

What are other effects for the communities?

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Methods (1/4)Data collection

Data from 3 villages surrounding the plantation Quantitative data: Household survey, 315 households,

two data rounds in 2008 and 2010, recall period 12 months

Qualitative data: Group interviews Treatment households (Jatropha households) and

control householdsTreatment group: households with at least one member working on the plantation in the reference period

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Mean comparison of the variables Income, Expenditures and Food security of households in the time between 2008 and 2010

Propensity Score Matching to compare Jatropha and control households, Difference-in-difference analysis to compare the two groups and between the two years

Assessment of poverty with the help of the poverty line

Assessment of income inequality with the help of the Gini coefficient

Assessment of other effects for the communities with the help of group interviews

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Methods (2/4)Data analysis

Significant socio-economic differences between households result in biased outcomes

Households are matched according to their propensity of working on the plantation (based on a binary logit model) and only similar households are compared to each other

Results from 2008 suggest higher incomes for Jatropha households for a subsample of the households below the poverty line, no or ambiguous impacts on food security

Methods (3/4)Comparison Jatropha / Control households – Propensity Score matching

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Source: Ravallion (2001), Caliendo and Kopeinig (2009)

Two differences: Between two groups at two different points in time, ideally before and after the „program“

Compare changes in incomes and food security from 2008 to 2010 and between Jatropha and control households

Matching of households based on Propensity Scores

Methods (4/4)Comparison Jatropha / Control households over time – Difference-in-Difference

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Source: Ravallion (2001), Caliendo and Kopeinig (2009)

The plantation offers regular work for a majority of households, more than 60 % of households had at least one member who worked on the plantation.

Jatropha households 2010

Control households 2010

Total

Jatrophahouseholds 2008

186 36 222

39,3 % 7,6 % 46,9 %

Control households 2008

115 136 251

24,3 % 28,8 % 53,1 %

Total 301 172 473

63,6 % 36,4% 100,0 %

Results (1/13)Plantation employment

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In 2010, 517 persons out of the sample worked on the plantation (269 in 2008), between 6 and 308 working days (2-312 in 2008), on average 103 days (114 in 2008)

46,7 % women and 53,3 % men, mean age 30.2 years Workers earn an average daily wage of 3.000 Ariary, which is

slightly lower than mean agricultural wage (opportunity costs for labour mostly higher than wage)

Low availability of other income sources

Results (2/13)Plantation employment

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Reduction of food production?

Only 2 households stated to have reduced agriculture due to the work on the plantation

Agriculture is most important income source for over 40 % of households, only 1 % named plantation, for 55 % agriculture and plantation are equally important

Real impact on food production difficult to estimate as agricultural production decreased considerably in 2010 (reduction of 62% for main food crops, compared to average production)

Households from the control group show a significant higher consumption of home-produced food

Results (3/13)Agriculture/Food production

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Who works on the plantation?

Significant differences between Jatropha households and control households:

Less agricultural area (total and per workforce), less cattle

Less yields and lower stocks Less access to off-farm income sources Lower value of household and agricultural assets Younger and bigger households, more members able to

work These differences did not change over time

Results (4/13)Determinants for working on the plantation

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Results (5/13)Differences Jatropha / Control households – T-test

Outcome variables (2010) N Control

N Treated

Mean C Mean T Mean total

sample

Mean difference

T - C

P (sign. level)

Income per capita (in Ariary) 97 199 116,369 142,633 134,026 26,246 0.120

% income on national poverty line3 97 199 24.82 30.43 28.59 5.60 0.120

Food expenditures per capita4 171 301 214,357 186,694 196,716 -27,663 0.017

Home- produced food cons. 171 301 96,882 80,455 86,406 16,427 0.060

Total expenditures per capita4 170 300 312,939 282,638 293,597 -30,301 0.033

Diet diversity (Number of single foods) 171 300 24.10 24.36 24.27 0.26 0.400

Meals with rice (week before) 171 300 14.99 14.02 14.37 -0.97 0.040

Meals with vegetables (week before) 171 300 14.02 14.55 14.36 0.52 0.212

Meals with meat (week before) 171 300 0.95 0.77 0.83 -0.18 0.111

Days not enough to eat (month before)

171 300 2.45 3.91 3.38 1.46 0.007

Months less than 3 meals per day (year before)

171 300 0.08 0.35 0.25 0.27 0.001

1 Control group: Households with no member working for the plantation2 Treatment group: Households with at least one member working for the plantation3 Poverty line 2010: 468.800 Ariary (INSTAT 2010)4 Expenditures with home-produced consumption

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Results (6/13)Differences Jatropha / Control households – Propensity Score matching

2008 2008 2010 2010

Outcome variable Full sample Subsample Full Sample Subsample(N=285) (N=142) (N=285) (N=142)

Income per year and capitaTreated 381,340 199.323 135,736 117,648

Controls 524,247 150,928 163,113 102,772ATT -142,907 48,395 -27,377 14,876% per capita income on poverty lineTreated 92.45 48.35 28.95 25.10Controls 133.04 37.15 34.79 21.92ATT -40.58 11.2 -5.84 3.18Expenditures per year and capitaTreated 186,738 178,576 171,319 165,765Controls 186,624 153,069 184,781 167,881ATT 114 25,508 -13,462 -2,126Food expenditures per year and capita Treated 104,883 105,429 108,641 108,580Controls 92,929 84,409 109,989 108,785ATT 11,954 21,020 -1,349 -215

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Results (6/13) Differences Jatropha / Control HHs

2008 2008 2010 2010 Outcome variable Full sample Subsample Full Sample SubsampleDiet diversity (Number of single foods consumed per year)Treated 20.98 20.88 24.59 24.66Controls 18.80 17.79 24.34 24.86ATT 2.18** 3.09 0.25 -0.20Meals with rice week beforeTreated 14.08 13.28 14.69 14.22Controls 14.77 14.26 11.48 10.21ATT -0.69 -0.99*** 3.21 4.01Meals with vegetable consumption week beforeTreated 9.13 8.22 14.83 14.65Controls 8.91 6.04 14.72 15.24ATT 0.22 2.18 0.12*** -0.59Meals with meat week beforeTreated 0.7 0.7 0.96 0.93Controls 0.97 1.0 0.90 0.42ATT -0.27 -0.3 0.06*** 0.51Days with less than three meals month beforeTreated 6.41 6.55 3.59 4.30Controls 7.34 9.03 3.03 3.63ATT -0.92 -2.48*** 0.56*** 0.67Months with less than three meals month beforeTreated 1.00 1.04 0.26 0.28Controls 1.28 1.57 0.40 0.63ATT -0.28*** -0.53 -0.14 -0.36*, **, *** significant at the 0.1, 0.05 and 0.01 level respectively, Significance levels calculated with bootstrap standard errors

Results (7/13)Changes over time – T-test

Outcome variables N Mean 2008 Mean 2010 Mean difference

P (sign. level)

Income per capita (in Ariary) 296 405,413 134,026 -271,387 0.000

% income on national poverty line3 299 99.50 28.59 -70.91 0.000

Food expenditures per capita4 308 110,715 106,734 -3,981 0.474

Total expenditures per capita4 314 228,732 170,847 -57,885 0.000

Diet diversity 312 19.96 24.29 4.34 0.000

Meals with rice (week before) 306 14.00 14.32 0.32 0.384

Meals with vegetables (week before) 306 9.17 14.32 5.15 0.000

Meals with meat (week before) 306 0.75 0.87 0.11 0.351

Days not enough to eat (month before) 306 7.23 3.40 -3.83 0.000

Months with less than 3 meals per day

(year before)

306 1.16 0.23 -0.94 0.000

3 Poverty line 2010: 468.800 Ariary (INSTAT 2010); Poverty line 2008: 407.433 Ariary (Grass 2011, based on INSTAT 2005)4 Without own consumption, inflation-adjusted (Inflation in 2009 was 8.4 and in 2010 8.1 % (World Bank 2011)

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Results (8/13)Changes over time – T-test

Income (in Ariary and per capita)

N Mean 2008

Mean 2010

Mean difference

P (sign. level)

Farm 309 256,788 20,672 -236,116 0.000Livestock 314 23,895 29,498 5,604 0.180Plantation 309 65,244 56,929 -8,315 0.155Off-farm 309 71,695 17,436 -54,259 0.000Total 296 405,413 134,026 -271,387 0.000Share of plantation income on total income 16% 43% 27 %

Expenditures (in Ariary and per capita)

N Mean 2008

Mean 2010

Mean difference

P (sign. level)

Food 308 110,715 106,734 -3,981 0.474Necessities 308 11,276 10,157 -1,119 0.086Clothes 316 19,407 11,025 -8,382 0.000Social obligations 287 12,140 5,163 -6,978 0.005Luxury expenditures 308 74,911 35,522 -39,389 0.000School 313 5,499 3,064 -2,435 0.010Total 314 228,732 170,847 -57,885 0.000Share of food on total expenditures 48.4 % 62.5 % 14.1 %All variables are inflation-adjusted (2009: 8.4% and 2010: 8.1%, Worldbank 2011)

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Results (9/13)Changes over time – Difference-in-Difference

Full sample (N=285) Subsample (N=142)Δ Income per capita

Treated -245,605 -81,674Controls -361,134 -48,156DID estimate 115,530 -33,581Δ % Poverty line

Treated -64.64 -74.9Controls -93.88 -78.1DID estimate 29.24 3.2Δ Expenditures per capita

Treated 3,758 -16,465Controls 17,060 -75,426DID estimate -13,302 58,961Δ Food expenditures per capitaTreated -15,418 741.67Controls -1,843 -30.820DID estimate -13,576 31,562

Less reduction in incomes for full sample less reduction in expenditures for subsample

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Results (10/13) Changes over time – DID estimatesΔ Diet diversity Full sample (N=285) Subsample (N=142)

Treated 3.61 3.78Controls 5.41 7.07DID estimate -1.94 -3.29Δ Rice consumptionTreated 0.62 0.95Controls -3.29 -4.05DID estimate 3.90 5.0Δ Vegetable consumptionTreated 5.7 6.42Controls 5.8 9.20DID estimate -0.1 -2.78Δ Meat consumptionTreated 0.25 0.24Controls -0.07 -0.58DID estimate 0.32 0.82Δ Not enough 30 daysTreated -2.83 -2.25Controls -4.31 -5.40DID estimate 1.48 3.15***Δ Not enough 12 monthsTreated -0.74 -0.76Controls -0.88 -0.93DID estimate 0.14*** 0.17*, **, *** significant at the 0.1, 0.05 and 0.01 level respectively, calculated with bootstrap standard errors

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Results (11/13)Assessment of poverty

2008 2010

Poverty line (in Ariary) 407,433 468,800

% of households below (income) 70.2 (N=315) 97.6 (N=315)

Number of households below 217 289

Mean % income on poverty line 99.50 28.59

% of households below (expenditures) n.a. 89.6

Mean % expenditures on poverty line n.a. 37.38

Poverty has increased from 2008 to 2010, number of households as well as severity of poverty.

Plantation incomes amounted to 43 % of total incomes in 2010, therefore poverty would be higher without the plantation.

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Results (12/13)Changes in income inequality

Without incomes from plantation work, income inequality would have increased significantly.

Based on expenditures, differences between households have decreased significantly.

Income decomposition suggests that plantation incomes have a small negative marginal effect on the Gini coefficient and that they favor the poor households more

2008 2010 Δ

Gini coefficient (based on total income per capita) 0.43 0.47 0.04

Gini coefficient (without plantation income) 0.48 0.61 0.13***

Gini coefficient (based on total expenditures per capita) 0.48 0.30 0.18***

*** significant at the 0.01 level, significance estimated with jackknife procedure

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Decrease in harvest and cattle theft Investments in schools and wells Additional income sources, market effects Credits for JatroGreen workers on the market Fear of expansion of plantation

Results (13/13)Other effects for the communities

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Small control group, especially households with a low probability to work on the plantation (no common support)

High range of working days (6-308), range of incomes (team leaders) therefore high variance in incomes

Spillover: Control group households benefit as well (higher purchasing power leads to more market activity, selling fertilizer to the plantation, renting rooms)

Income and expenditures in 2008 were already influenced by the plantation and on a higher level, the true impact of the plantation may therefore be underestimated.

DiscussionShortcomings Propensity Score Matching / Difference in difference

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Poverty reduction potential, especially in years with limited agricultural production

Positive effects in 2008 have been mitigated by the reduction in food production in 2010

Contribution to rural development Decreasing income inequality Not all possible benefits have been realized/quantified

yet (energy supply, substitution of firewood, erosion potential)

Conclusions

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Thank you for your attention!

This study is part of the project „Jatropha cultivation in Madagasar“ funded by the foundations EnBW-

Regenwaldstiftung and Stiftung Energieforschung Baden-Württemberg, data collection was partly funded by the

foundation fiat panis(More information at https://jatropha-madagaskar.uni-hohenheim.de)

Acknowledgements

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Backup

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Backup – Decomposition of Gini by income source

2008 2010Sk Gk Rk Share % Δ Sk Gk Rk Share % Δ

Income source

Farm 0.61 0.52 0.85 0.63 0.02 0.16 0.76 0.60 0.16 -0.00

Livestock 0.06 0.82 0.56 0.06 0.00 0.23 0.86 0.77 0.33 0.10

Off-farm 0.17 0.80 0.62 0.20 0.03 0.14 0.83 0.36 0.09 -0.05

Plantation 0.16 0.76 0.39 0.11 -0.05 0.46 0.65 0.67 0.42 -0.04

Total 1.00 0.43 1.00 0.47Sk: Share of income source on total incomeGk: Gini coefficient for each income sourceRk: the Gini correlation of income from source k with the distribution of total incomeShare: share of each income source in total inequality% Δ: refers to the impact that a 1% change in the respective income source will have on inequality

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Backup – Determinants for working at the plantation

Variables Coefficient Signif. Marginal effect

95% Confidence interval

Sum Workforce 0.2653 0.016 0.0661 0.0125 0.1197Land per worker -0.2142 0.018 -0.0534 -0.0978 -0.0090Dummy Sakafia 1.6337 0.001 0.3544 0.1988 0.5099Dummy Maroilo -2.7453 0.000 -0.5631 -0.6642 -0.4620Own business -0.6794 0.027 -0.1682 -0.3143 -0.0220Public service -1.5417 0.019 -0.3411 -0.5571 -0.1251Year of household formation 0.0222 0.034 0.0055 0.0004 0.0106Dummy Zebu -0.6330 0.049 -0.1569 -0.3101 -0.0037Constant -46.586 0.036N 336Pseudo R2 0.2970Chi square 0.0000Pos. predictive value 75.94Neg. pred. value 84.68Correctly classified 79.17

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Methods (2/5)Outcome variables over time

Variable Expected sign

Explanation

Total income + Higher total income due to income from plantation work and market effects

Agricultural production

0 Few households decreased their production due to plantation work, few households increased their production due to availability of inputs, the majority of households did not change their farming patterns

Expenditures + Higher expenditures due to an increase in income

Food expenditures + Higher food expenditures due to an increase in income

Food security/ Diet diversity

+ More income is available to sustain consumption over lean season and to purchase on market and no change in production level

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Common support

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Common support for full and subsample

Source: Own data, computed in Stata with psmatch2

Matching success

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Variable Sample Mean T Mean C % bias % Δ bias p>|t|

Workforce Unmatched 2.625 2.429 15.1 0.197

Matched 2.625 2.750 -9.6 36.4 0.373

Own business Unmatched 0.206 0.353 -33.1 0.005

Matched 0.206 0.188 4.2 87.3 0.674

Public/Military Service Unmatched 0.375 0.045 -3.8 0.744

service Matched 0.375 0.018 9.4 -146.3 0.312

Dummy Sakafia Unmatched 0.275 0.030 72.2 0.000

Matched 0.275 0.306 -9.2 87.2 0.540

Dummy Maroilo Unmatched 0.050 0.466 -107.7 0.000

Matched 0.050 0.044 1.6 98.5 0.792

More than 2 Unmatched 0.231 0.383 -33.3 0.005

Zebus Matched 0.231 0.338 -23.3 30.2 0.035

Land per Unmatched 0.824 1.319 -30.0 0.010

workforce Matched 0.824 1.033 -12.7 57.8 0.135

Year of HH Unmatched 1995 1990 41.7 0.000

Formation Matched 1995 1996 -9.0 78.5 0.375

Sample Pseudo R2 LR chi2 p>chi2Unmatched 0.312 126.1 0.000Matched 0.022 9.77 0.282

the impacts of a jatropha plantation on food security and income of rural households in madagascar...

Documents

food security of households

income of rural households

similar households

jatropha plantation

data collection data

food security methods

panel data analysis

biased outcomes households