Impact of Rural Livelihoods Programs in Andhra Pradesh

1. Impact of Rural Livelihoods Programs in Andhra Pradesh Summary of key outcomes of Rural livelihoods programs in Andhra Pradesh Impact Evaluation Workshop, Aug 12h, 2013

2. Investment Strategy Partnerships and Convergence to enhance livelihoods • Various public and private sector partnerships with supply-side institutions were formed to diversify and expand livelihoods of poor households Leveraging market-based funds Bank linkages were facilitated resulting in improved access to finance creating a pro-poor investment climate. CIF: Revolving Risk Fund • CIF became a risk fund for experimentation and product innovation resulting in enhanced and diversified livelihoods. Poor supplied and managed their own resources • Poor’s invested their savings - improving the sustainability of institutional platforms. Capacity Building and Strengthening of Institutions • Institution building was treated as a core investment Sustainable and Resilient Institutions for Poor Enhanced and expanded livelihood services

3. Key Interventions • Social Mobilization to building community based institutions of poor • Facilitating Bank-linkages to improve access to finance • Community Managed Sustainable Agriculture for enhancement of agricultural income • Connecting dairy producers with markets and intervention to improve productivity of livestock rearing • Skill development and employment generation through EGMM • Community Managed Procurement Centers to link agricultural producers to markets • Nutrition Centers to improve maternal and child mortality, and malnutrition. • Social Action Committees to enable gender empowerment • Convergence with other government schemes to improve access to last mile service delivery

4. Key Impacts • Creation of an institutional platform for rural poor • Favorable investment climate for rural poor • Enhancement of existing livelihoods through the following key interventions • Sustainable Agriculture (CMSA) • Livestock and Dairy • Non-farm sector including small manufacturing • Transition to formal sector through skill-based training and improved access to higher education • Higher market share for poor in the rural livelihoods economy • Household-level impact on consumption, assets and financial behavior Various data sources have been used for this analysis. MIS data from SERP and household surveys conducted by CESS are the main sources.

5. Social Mobilization • Project efforts accelerated the formation of four-tiered community-based institutions • 173,841 community resource person hired to provide support to these institutions • 11.2 million women mobilized into 998,000 self-help groups • Affinity based SHGs further federated into Village Organizations, MandalSamakhayas, and District Fedreations. • 88% of SCs and 80% of STs covered under the project Source: Project MIS Data

6. Favorable Investment Climate for Rural Poor • Creation of an ecosystem of social capital based financing in the state • Facilitating bank-linkages through bank-mithras • Encouraging poor to invest their own money in community-based institutions • US$1.1 billion mobilized in internal savings • US$7.86 billion cumulative credit flow from commercial banks • US$21 leveraged for every US$1 invested by the project Source: Project MIS Data, commercial banks

7. Higher Market share for poor Community based organizations have taken away a major share of rural economy: • 17% of the organized market share of the dairy sector • 50%+ of the cooperative market share in the dairy intensive districts • 10% of rural credit market controlled by federation under the project • 43% of procured under the MSP scheme is by procurement centers • 10% of paddy procured for PDS scheme • 60% of insurance enrollment • 50% of co-contributory pension schemes • 449,205 youth placed and 582,595 youth trained since 2005 Source: Project MIS data, World Bank estimates, and various external evaluations

8. Cost effectiveness of the program • The livelihoods project in AP achieved all this in a very cost-effective manner • For every US$1 CIF invested groups were able to leverage US$21 as loans • Annual turnover per employee was over US$1 million • Management cost to investment ratio was only .7% Source: Government of AP and Project MIS Data

9. Household level Impact Source: Prennushi & Gupta (Forthcoming) Based on a survey conducted by CESS

10. Background of the study • Household survey conducted by CESS focusing on interventions between 2004-2008 • mobilization • savings • bank loans ("bank linkage") • skills training • productive activities and services at a very early stage • Following outcomes have been looked at • Consumption indicators: Rice, vegetables, pulses, milk, total food, education, health and total consumption • Assets indicators: Livestock, durables, non-farm, farm assets, land operated and land owned • Financial Balances : savings, loans, and net debt • Forthcoming: Education, health and gender empowerment

11. Empirical Analysis • Various definitions of participants vs. non-participants, looking at the impact of time spent in the program • Early – over 4 years • Mid – 2-4 years • Late – less than 2 years • Three categories of households: Poorest, Poor and Not poor • Methodology: Propensity score matching + difference-in-difference

12. How to read the results • 46% higher increase in monthly consumption amongst participants exposed to the program for more than 4 years (early joiners) • 96/208=46% • This effect is quite large, almost 30% increase over the 2004-05 poverty line.

13. Consumption Expenditures • Poorest: • Early joiners saw total expenditures increase (46%) more than non-participants • Large and significant impact on food consumption (171%) amongst early joiners • Rice (79%) and milk consumption(186%) difference are also significant for early joiners • Poor participants: • Generally positive differences, but overall not significant • Non-poor participants: • Mixed differences, with significant positive differences for health and negative differences for alcohol for early joiners. • Large and significant impact on education expenditures for poor and poorest • Per-capita education expenditure has increased five folds for some categories (increased by INR12-25 per capita per month)

14. Assets • Poorest: • Positive differences in the values of livestock for early-joiners(160%) and mid-joiners(300%) • Large and significant increase for durables in all categories (100-150%) • Mixed results for land operated and land owned • Poor: • Large and significant differences in the values of land owned (80-100%) and land operated (90-300%) • Positive differences in the value of non-farm assets (such as means of transport) (300%) • Livestock and durable value differences were also higher than non participants, but not significant • Not-so-poor: • Differences are mixed

15. Financial Behavior • Female household members can now borrow significantly more after participating in the program (INR 2,000 – INR 4,000) • Poorest: • Across categories household net-debt has gone up (100-120%); (INR4000- INR-6000) • Poor: • Net-debt has increased but results are not significant • Not-so-poor: • No increase in net-debt due to program participation • Results in savings are mixed and mostly non-significant.

16. Caveats • This is not a randomized control trial • We can only compare SHG participants with non-participants in villages with the program • We cannot fully rule out self-selection bias • In any case, we can only assess the additional benefits accruing to program participants compared to non-participants in program villages, not the full impact of the program on all

17. Conclusion • Poorest benefit the most • Increased ability to borrow, which is invested in livestock and durable goods • Length of exposure matters • Consumption expenditures are significantly higher with time • An adequately designed randomized trial would have eliminated doubts about the selection bias • Survey data are not enough for a good IE • MIS and qualitative data has to be accompanied with it.

18. Thank you

19. Additional Slides

20. Investment Strategy • Capacity building and institutional strengthening of community organizations • Disbursement of a revolving fund – Community Investment Fund- for internal lending. • Communities savings and CIF acted as a catalyst in facilitating access to external funds. • Skill building and financial management training • Technical assistance to poor households to improve the productivity of their borrowings • Institutional Platform facilitated by the project have become a single-window system for both public and private sector to interact with rural poor in the state • Project invested in building supporting market-linkages and infrastructure

21. Intervention Strategy of AP

22. Enhanced Livelihoods Community Managed Procurement Center(CMPCs): Aggregation of local produce and single window marketing facility to improve market linkages. • 2065 CMPCs have handled more than 100 commodities since 2003 • 1.6 million tons worth $344 million handled during 2011 • US$58 increase in agricultural income • 10% increase in Maize prices due to CMPCs

23. Community Managed Sustainable Agriculture • Guiding Principles • Observation and documentation of pest and predator behavior, pest incidence on the farms • Replace chemical pesticides with physical methods of pest management complemented by botanical formulations and bio pesticides • Aim to manage pest populations; not to eliminate pests; • Focus on balancing predator and pest populations; • Enhance and maintain soil health through mulching, green manure and vermicompost • Reduce usage of synthetic(inorganic) fertilizers and later stop using it • Increase diversity and intensity of crops • Identify appropriate cropping systems – inter-cropping, multi-cropping, crop rotations; • Preserve local varieties and land race • Maintain local land races and crop genetic diversity • Implementation Strategy • Management by women’s organizations • “Decentralized extension system”, accountable to grassroots women’s organizations • Community Resource Person (CRPs) – scaling-up “by” the community

24. CMSA: End to End solution across agri-value chain • Mobilization, capacity building Soil Fertility Bio-input enterprises Best Practitioners Community marketing professionals Standards & Traceability Food security line Moisture conservation Local resource based pest mgmt Community extension On-farm quality upgrade support Community procurement centers Tie up with wholesalers Small irrigation Farmer field Schools Small Scale Infrastructure Tie-up with large coops & corporates Credit & Insurance

25. CMSA: Benefits and Impacts • 1.9 million farmers cultivated around 3.87 million acres under CMSA • Upto 47% reduction in cost of cultivation • 8-25% improvement in yields • US$75 million have been estimated to be saved cumulatively from CMSA • US$560 million additional income generated from CMSA Non - CMSA Field CMSA Field

26. CMSA: Systemic Impact • ~ 24% of all farmers in mandals, which have the CMSA interventions, have adopted these practices1 • ~18% of all land under cultivation is under CMSA in these mandals1 • ~6% of state’s agriculture growth can be attributed to CMSA2 • ~22% of agricultural economic growth in mandals, which have the CMSA intervention, can be attributed to CMSA • 7-9% of state-wide pesticide usage has been reduced due to CMSA. 1 2012; Based on m-CMSA and Agricultural Department, Government of AP 2 2005-2011; based on external evaluations, Government of AP

27. Livestock and Dairying: Benefits & Impacts Provision of animal treatment and breeding services at the village level; formation of a dedicated community based supply chain catering to small dairy farmers; and fodder development initiatives • Currently 57% of SHG households posses livestock • Community Federation manage 196 bulk- chilling units at the Mandal level • 4215 Village Procurement centers managed by community federation • 1,52,000 milk producers linked to the supply chain • 250,000: average liters milk per day handled in the year

28. Livestock and Dairying: Market share 17% of the organized market share 50%+ of the cooperative market share in the dairy intensive districts

29. Livestock and Dairying: Market share At full utilization, community organizations will control 55% of the market share.

30. Employment Generation and Marketing Mission Uses community based institutions to identify and mobilize youth to train at various training academies and forges partnerships with various private sector players • 449,205 youth placed since 2005 • 582,595 youth trained since 2005 • 42.7% of youth trained are from vulnerable groups