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The impacts of a Jatropha plantation on food security and income of rural households in Madagascar – A panel data analys

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 16 th ICABR Conference – 128 th EAAE Seminar “ The Political Economy of the Bioeconomy : Biotechnology and Biofuel ”

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The impacts of a Jatropha plantation on food security and income of rural households in Madagascar – A panel data analys

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  1. 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
  2. Table of contents Research questions and objectives Methods Results Discussion and conclusion Source: JatroSolutions 2011 The impacts of a Jatropha plantation on food security and income of rural households in Madagascar – A panel data analysis
  3. 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? The impacts of a Jatropha plantation on food security and income of rural households in Madagascar – A panel data analysis
  4. 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 The impacts of a Jatropha plantation on food security and income of rural households in Madagascar – A panel data analysis
  5. 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 Methods (2/4)Data analysis The impacts of a Jatropha plantation on food security and income of rural households in Madagascar – A panel data analysis
  6. 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 Source: Ravallion (2001), Caliendo and Kopeinig (2009) The impacts of a Jatropha plantation on food security and income of rural households in Madagascar – A panel data analysis
  7. 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 Source: Ravallion (2001), Caliendo and Kopeinig (2009) The impacts of a Jatropha plantation on food security and income of rural households in Madagascar – A panel data analysis
  8. 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. Results (1/13)Plantation employment The impacts of a Jatropha plantation on food security and income of rural households in Madagascar – A panel data analysis
  9. 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 The impacts of a Jatropha plantation on food security and income of rural households in Madagascar – A panel data analysis
  10. 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 The impacts of a Jatropha plantation on food security and income of rural households in Madagascar – A panel data analysis
  11. 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 The impacts of a Jatropha plantation on food security and income of rural households in Madagascar – A panel data analysis
  12. Results (5/13)Differences Jatropha / Control households – T-test The impacts of a Jatropha plantation on food security and income of rural households in Madagascar – A panel data analysis
  13. Results (6/13)Differences Jatropha / Control households – Propensity Score matching The impacts of a Jatropha plantation on food security and income of rural households in Madagascar – A panel data analysis
  14. Results (6/13)Differences Jatropha / Control HHs
  15. Results (7/13)Changes over time – T-test The impacts of a Jatropha plantation on food security and income of rural households in Madagascar – A panel data analysis
  16. Results (8/13)Changes over time – T-test The impacts of a Jatropha plantation on food security and income of rural households in Madagascar – A panel data analysis
  17. Results (9/13)Changes over time – Difference-in-Difference Less reduction in incomes for full sample less reduction in expenditures for subsample The impacts of a Jatropha plantation on food security and income of rural households in Madagascar – A panel data analysis
  18. Results (10/13) Changes over time – DID estimates
  19. Results (11/13)Assessment of poverty 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. The impacts of a Jatropha plantation on food security and income of rural households in Madagascar – A panel data analysis
  20. 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 The impacts of a Jatropha plantation on food security and income of rural households in Madagascar – A panel data analysis
  21. 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 The impacts of a Jatropha plantation on food security and income of rural households in Madagascar – A panel data analysis
  22. 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 The impacts of a Jatropha plantation on food security and income of rural households in Madagascar – A panel data analysis
  23. 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 The impacts of a Jatropha plantation on food security and income of rural households in Madagascar – A panel data analysis
  24. 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 The impacts of a Jatropha plantation on food security and income of rural households in Madagascar – A panel data analysis
  25. Backup The impacts of a Jatropha plantation on food security and income of rural households in Madagascar – A panel data analysis
  26. Backup – Decomposition of Gini by income source The impacts of a Jatropha plantation on food security and income of rural households in Madagascar – A panel data analysis
  27. Backup – Determinants for working at the plantation The impacts of a Jatropha plantation on food security and income of rural households in Madagascar – A panel data analysis
  28. The impacts of a Jatropha plantation on food security and income of rural households in Madagascar – A panel data analysis
  29. The impacts of a Jatropha plantation on food security and income of rural households in Madagascar – A panel data analysis
  30. Methods (2/5)Outcome variables over time The impacts of a Jatropha plantation on food security and income of rural households in Madagascar – A panel data analysis
  31. Common support Common support for full and subsample Source: Own data, computed in Stata with psmatch2 The impacts of a Jatropha plantation on food security and income of rural households in Madagascar – A panel data analysis
  32. Matching success The impacts of a Jatropha plantation on food security and income of rural households in Madagascar – A panel data analysis
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