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Abstract
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Before
Climate change induced rainfall and temperature variability pose a substantial economic risk to smallholder dairy farmers in developing countries (Tadesse and Dereje 2018). Rainwater harvesting tanks may help farmers adapt to climate uncertainty. Previous work has found that Asset Collateralized Loans (ACLs) help farmers purchase water tanks in Kenya (Jack et al, 2019). Building on this previous work, this study aims to evaluate the impact of ACLs for water tanks on economic and household outcomes among dairy farmers in Kenya. Specifically, we will use administrative data from dairy cooperatives and survey data to investigate whether improved access to water tanks helps farmers mitigate productivity shocks and domestic water shortages during dry spells. We will also examine how improved water access affects time and water allocation within household members.
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After
Rainfall and temperature variability induced by climate change pose a substantial economic risk to smallholder dairy farmers in developing countries (Tadesse and Dereje 2018). Rainwater harvesting tanks may help farmers adapt to climate uncertainty. Previous work has found that Asset Collateralized Loans (ACLs) help farmers purchase water tanks in Kenya (Jack et al, 2023). This study aims to validate past work and evaluate the impact of ACLs for water tanks on economic and household outcomes among dairy farmers in Kenya, with a focus on climate resilience. The study will also test an alternative loan design in which required monthly payments are a function of milk income, which may be better adapted to farmers with seasonally variable income.
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Last Published
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July 12, 2022 08:43 PM
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After
January 09, 2024 08:41 PM
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Intervention (Public)
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Before
This study will evaluate the impacts of addressing credit constraints which has the potential to unlock smallholder dairy productivity and income of the farmers. In our interventions, we will (1) conduct sensitization on the asset-collateralized loan (ACL) and register interest with the dairy farmers from two dairy cooperatives in the Rift Valley of Kenya, (2) offer an asset-collateralized loan (ACL) for a water tank to a random sample of the interested and eligible treatment participants, (3) pilot the use of low-cost SMS surveys to gather additional insights and measure time use and milk production immediately during the implementation phase.
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After
This study will evaluate the impacts of addressing credit constraints to improve smallholder dairy productivity and climate resilience. The study has a control group and two treatment groups: (1) a standard declining-balance asset collatearalized loan, and (2) an income-sharing loan, with payments defined as a percentage of monthly milk income capped by a minimum and maximum payment. Preferences for both loan contracts among treated farmers will be elicited by a Becker-DeGroot-Marschak procedure.
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Primary Outcomes (End Points)
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Before
Milk production and sales
Health indicators such as incidence of diarrhea
Time use
Water availability and allocation
Subjective well-being
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After
Loan take-up and repayment
Milk production and sales
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Experimental Design (Public)
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Before
This experiment will evaluate the impacts of addressing an important constraint that limits agricultural incomes among smallholder dairy farmers: credit. We will partner with two dairy cooperatives in Kenya and their corresponding financial institutions (SACCOs) to implement a randomized control trial among dairy farmers in the Rift Valley of Kenya. We will offer interested, eligible participants an asset-collateralized loan for a water storage tank.
Staff of our partner cooperatives will communicate information to their members about a new lending program for water tank loans. Following this communications campaign, we will call members to conduct a pre-screening for interest in taking an asset-collateralized loan for a water tank. Our primary experimental sample will consist of the first 1,500 eligible, interested members identified by the cooperatives.
Among this sample, we will conduct an in-person baseline survey. We will then randomize this sample at the household level into a treatment group which will be invited to apply for an asset-collateralized loan for a water tank (n = 750) and a control group which will receive no additional loan access (n = 750). We will stratify the randomization on SACCO, agroecological zone and characteristics in the baseline survey and/or administrative data that strongly predict milk production and sales.
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After
This experiment will evaluate the impacts of addressing an important constraint that limits agricultural incomes among smallholder dairy farmers: credit. We have partnered with two dairy cooperatives in Kenya and their corresponding financial institutions (SACCOs) to implement a randomized control trial among dairy farmers in the Rift Valley of Kenya. We will offer interested, eligible participants an asset-collateralized loan for a water storage tank.
Partner cooperatives will communicate information to their members about a new lending program for water tank loans. Following this communications campaign, we will call members to conduct a pre-screening for interest in taking an asset-collateralized loan for a water tank. Our primary experimental sample will consist of the first 1,500 eligible, interested members identified by the cooperatives.
Among this sample, we will conduct an in-person baseline survey. We will then randomize this sample at the household level into a treatment group which will be invited to apply for an asset-collateralized loan for a water tank (n = 750) and a control group which will receive no additional loan access (n = 750). Farmers in the treatment group will be randomly assigned to receive either an offer of a standard declining balance loan or an income-sharing loan with required monthly payments determined as a function of milk income. We will stratify the randomization on SACCO, agroecological zone, and characteristics in the baseline survey and/or administrative data that strongly predict milk production and sales.
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Sample size (or number of clusters) by treatment arms
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750 farmers (50:50)
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After
750 farmers (50:50), with 325 farmers offered each type of loan
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Secondary Outcomes (End Points)
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Before
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After
Health indicators such as incidence of diarrhea
Time use
Water availability and allocation
Subjective well-being
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