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IFPRI Uganda by Gian Nicola Francesconi

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The evaluation of an intermediate impact on organizational performance allows to explain a program’s success or failure, which can be more important than identifying ultimate outcomes at the farm-household level (as in this case).

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IFPRI Uganda by Gian Nicola Francesconi

  1. 1. Promoting the role of farmer-based organizations for value chain integration in Ghana: an impact evaluation based on organizational diagnostics Nicola Francesconi, CIAT Fleur Wouterse, IFPRI
  2. 2. Did you know? • the UN declared 2012 as the International Year of Cooperatives • cooperatives play a major role in rural financial and extension services worldwide • 50% of global agricultural output is marketed through cooperatives • cooperatives were instrumental for the success of family farms in the US and EU Coops prevalence in Africa % of rural villages with at least one coop Senegal 47 Burkina Faso 56 Ethiopia 35 Uganda 31 Recent data from CIAT shows that 80% of Ugandan bean producers are members of at least one farmer organization based on cooperative values and principles
  3. 3. What is a cooperative? Not an NGO or a parastatal because it is a for profit organization Not an Investor-Owned Firm (IOF) because it is: an organization owned and controlled by the individuals benefiting from its services or a user-owned, user-controlled and user-benefitted organization
  4. 4. The History of Rural Cooperation in Ghana (from defensive to offensive) Time Market-driven State-driven Community-driven Mutuals Coops FBOs Pre-colonial Colonial & Post Independence Post Structural Adjustment Governance In 2010: 10,000 FBOs and growing rapidly… but informal, at an infant stage and still uncompetitive
  5. 5. How to support the development of FBOs in order to boost agri-commercialization among Ghanaian farmers? The MiDA program • Initial population: 3,052 voluntarily enlisted and surveyed FBOs from target horticulture/maize areas • Selection criteria: approx. 50 members, women’s equal participation, community-based, recently established (or re-established), strong leadership • Intervention: collateral to facilitate FBOs’ access to credit for collective investments to improve farmers’ vertical integration into value chains (warehouses, vehicles, processing plants, etc.) • Incentives for participation: starter packs to member farmers (fertilizer, seeds, equipment, cash, etc.) • Selection outcome: 1,242 FBOs were selected into the program
  6. 6. MiDA’s failure: • Only 269 loans disbursed, for 1,242 participants!!! • Many FBOs did not apply for a loan • Many other FBOs were not successful in their application due to the poor quality of their business plans • Due to this shortfall the MiDA program was widely considered to have failed in improving farmers’ commercialization. To what extent did the program fail (negligible or negative impact)? And what are the reasons for this failure?
  7. 7. Theory of Change MiDA Program Intervention Negative impact on organizational performance Negative impact on farmers’ commercialization No impact on organizational performance The incentives and selection criteria introduced by the program had either a negligible or negative intermediate impact on FBOs’ performance in mobilizing collective investments, and therefore the ultimate impact on farmers’ commercialization is also expected to be either negative or insignificant. No impact on farmers’ commercialization How to test this theory of change?
  8. 8. Impact Evaluation based on Organizational Diagnostics • The programs’ ultimate impact can be defined and explained on the basis of its intermediate impact on organizational performance. • But impact evaluations are usually designed to identify ultimate impacts at the farm household level, providing little insights about organizational reasons for success or failure (they identify unique and static impacts for a given place and point in time) • Ultimate impacts are also indirectly related to a program and thus their identification and attribution tends to be uncertain and partial. • Measuring intermediate impacts on organizational performance has the potential to identify more directly attributable, holistic and longer term, behavioral impacts. • Therefore we adapted impact evaluation techniques to evaluate intermediate impacts on organizational performance.
  9. 9. Data collection • Survey data on 500 FBOs collected by 17 MSc students using questionnaires uploaded into smartphones. • The sample was randomly drawn from the original MiDA list of 3,052 FBOs: all surveyed FBOs wanted to participate (< self-selection bias)!! • Semi-structured interviews and games with three board members per FBO to capture: collective investments, participation in the program, proxies for selection criteria and fixed effects.
  10. 10. Data descriptives 500 observations, fixed effects excluded
  11. 11. Risk-game (with three leaders per FBO) Sequence of the game • the three board members were separated (no hear, no see) • they were explained the rules of the game through a demo • they were asked to pick a risk option from 0 to 7 (Binswanger 1980) • they were gathered in a central place and a coin was tossed • players’ individual payoffs were calculated and handed out • Leadership strength was measured by the average standard deviation (from the median) of the risk options picked by the three players, i.e. by the level of homogeneity in leaders’ risk preferences
  12. 12. Binswanger’s risk game
  13. 13. IV regression: first stage R-squared 0.18, 500 obs., Kleibergen-Paap and Hansen J tests
  14. 14. IV regression: second stage R-squared 0.10, 500 obs., consistent with OLS
  15. 15. Conclusions • Likely negative impact on farmers’ commercialization because the: I. program incentives may have induced shirking among member-farmers (avoidance to invest in the common cause) II. program selection strategy failed to promote participation by older (more consolidated) FBOs with stronger leadership, which are more likely to develop feasible investment plans • The evaluation of an intermediate impact on organizational performance allows to explain a program’s success or failure, which can be more important than identifying ultimate outcomes at the farm-household level (as in this case).

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