Forschung zur Entwicklungsökonomie und -politik / Research in development economics and policy

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Certification as an upgrading strategy for small-scale farmers and their cooperatives : a value chain analysis for Nicaraguan coffee
(2010) Kiemen, Anna; Beuchelt, Tina
For many small producers in developing countries coffee is a major income source. However, the coffee market is characterized by high price volatility and increased power concentration among buyers in consuming countries. Due to the very low international coffee prices during the recent coffee crisis and an increased demand among consumers for healthy and ethical products as well as for high quality, interest in standards and certification has increased substantially in coffee producing and consuming countries. Responding to the demand for differentiated products and accessing these new and potentially more profitable markets is especially challenging for poor small-scale farmers in developing countries. Although certification schemes and standards are widely applied and promoted, little research has been conducted identifying the complete value chains for certified coffee, their structure and gross income shares among the different chain actors. The framework for this study is based on the value chain concept. The research analyses selected conventional and Fairtrade value chains in terms of prices paid at different levels, information flows among chain actors, governance structures and upgrading strategies. The focus is on Nicaragua?s small-scale coffee producers, organised in cooperatives, and their upgrading strategies with special attention paid to organic and Fairtrade certification. Qualitative interviews have been conducted with all relevant chain actors. Results show that the structure of the value chain has a major influence on the benefits for individual farmers and their involvement in upgrading strategies. Although higher prices are paid to producers for organic-Fairtrade coffee than for conventional or conventional Fairtrade coffee, the producers? share on the final retail price is substantially lower in the certified chains than in the conventional chain. Producers face limited bargaining power on the quality premiums paid by buyers in consuming countries. The paper emphasizes the need for transparency and appropriate chain management to improve small-scale farmers? integration in value chain upgrading activities. An enhanced knowledge transfer among chain actors could increase farmers? understanding of differentiated markets and provide them with information on the coffee attributes sought by consumers. Being able to meet consumer expectations on attributes and quality standards could empower farmers with greater bargaining power and enable them to demand adequately higher prices. Simultaneously, business skills and management capacity need to be enhanced especially at the level of producers and leaders of grassroot cooperatives, but also at second order cooperatives? staff.
Drought impacts and related risk management by smallholder farmers in developing countries : evidence from Awash River Basin, Ethiopia
(2010) Zeller, Manfred; Keil, Alwin; Murendo, Conrad
Climate risk studies have largely neglected household coping and adaptation strategies. In this paper we analyze drought impacts, drought risk management, and resulting drought resilience in Awash River Basin of Ethiopia based on socio-economic data collected from 43 randomly selected Peasant Associations. We find that severe drought periods have led to a significant depression of crop yields and to widespread death of livestock in the past. Drought periods have drastically increased the proportion of food insecure households and lengthened the duration of food insecurity in the area. Since, with climate change, drought periods are predicted to become more frequent in this region in the future, the problem of food insecurity is likely to become even more severe. Ex-ante adaptation strategies are widely practised in Awash River Basin and include the storage of crop residues as fodder for livestock, the rearing of drought tolerant livestock, mixed cropping, the use of short duration crop varieties, and the adoption of soil and water conservation practices. Ex-post coping strategies utilized to manage the consequences of drought include the sale of assets and the reliance on consumption loans and support offered by informal networks. Therefore, suitable policies are urgently needed to strengthen farmers? capacity to adapt to and cope with drought. Training farmers in the production and conservation of livestock fodder as well as in soil and water conservation practices appear to be key policy options relevant in the area. Moreover, improving farmers? access to climate related information, especially drought forecasts, could improve the timely adoption of effective adaptation measures.
Nachwachsende Rohstoffe ? entwicklungspolitisch einmal anders gedacht
(2011) Zeller, Manfred; Breuer, Thomas; Henckes, Christian; Loos, Tim K.
Steigende Agrarpreise, und damit steigende Nahrungsmittelpreise, beleben die Diskussion über die Notwendigkeit der ?Non-Food?-Nutzung (Anbau von Energiepflanzen, aber auch Pflanzen für die stoffliche Nutzung, z.B. Holz oder Kautschuk) von Agrarrohstoffen. Dieses Diskussionspapier betrachtet die allgemeinen Brennpunkte der Debatte und erörtert speziell die Möglichkeiten von Biotreibstoffen als Triebkraft für Investitionen in Infrastruktur und Marktzugang im ländlichen Raum und als Treiber der Nachhaltigkeitsdiskussion im Agrarsektor der Entwicklungs- und Schwellenländer. Auf lange Sicht ist die konkurrierende Nutzung von Land für Energie- und Nahrungsmittelpflanzen differenziert zu betrachten. Kurz- bis mittelfristig jedoch ist die energetische und stoffliche Nutzung von Agrarprodukten eine alternative Markt- und damit auch Einkommensmöglichkeit für die Landwirtschaft. In den Industrieländern bietet der Anbau von nachwachsenden Rohstoffen die Möglichkeit, Überschussproduktionen einzudämmen und Exportsubventionen abzubauen. Damit wird auch deren preissenkender Einfluss auf den Weltmarkt abgebaut. In den Entwicklungsländern könnten sich dadurch Produktionsanreize im Agrarsektor ergeben, die, ausgelöst durch landwirtschaftliche- und außerlandwirtschaftliche Beschäftigungseffekte, eine Armutsreduktion induzieren könnten. Zusätzlich besteht die Möglichkeit, den lokalen Energiebedarf mit ökologisch nachhaltigen Ressourcen zu unterstützen und damit den Kleinbauern neben dem Marktzugang auch die Möglichkeit zur lokalen Veredelung zu bieten. Allerdings würde sich die Situation für Erzeuger in Entwicklungsländern noch zusätzlich verbessern, wenn Industrieländer nicht die Erzeugung von nachwachsenden Rohstoffen (NawaRo) subventionieren, sondern auf tarifäre und nichttarifäre Importbarrieren für Agrarprodukte, inklusive der nachwachsenden Rohstoffe, verzichten würden. Im Zusammenhang mit der Förderung von nachwachsenden Rohstoffen stellen sich der Entwicklungszusammenarbeit verschiedene Herausforderungen. Um eine breitenwirksame Armutsminderung zu erzielen, muss vor allem die kleinbäuerliche Landwirtschaft unterstützt werden. Hierzu sollten Ansätze verfolgt werden, in denen die bäuerlichen Produktionssysteme, wegen ihrer Beschäftigungseffekte, mit agro-industriellen Verarbeitungsmöglichkeiten kombiniert werden. In diesem Zusammenhang besteht die Notwendigkeit und die Möglichkeit, die sozialen (inkl. breitenwirksames Wachstum) und ökologischen (Erhalt und Förderung der natürlichen Ressouren) Bedingungen der Produktion aller Agrarrohstoffe nachhaltig zu gestalten.
Targeting of and outreach to the poor by rural development nonprofit organizations in Cameroon
(2010) Balgah, Azibo Roland; Buchenrieder, Gertrud
The importance of nonprofit organizations such as rural development organizations, farmers associations and common initiative groups as drivers of change in rural areas has been generally recognized in the economics of nonprofit organizations. While the economic theories attempt to explain the formation and functioning of nonprofit organizations, the targeting and outreach performance of these organizations has received little attention and at best is empirically divergent. Using the example of a nonprofit rural development organization in North West Cameroon, this paper analyzes the relative poverty of beneficiaries and non beneficiaries of its small scale fish farming program as a proxy for targeting efficiency. Poverty is measured through multiple indicators as well as household incomes. The results show that the nonprofit organization did a commendable job in serving poor communities, although its self targeting approach led to a disproportionately higher share of beneficiaries from the moderately poor and better-off terciles than from the poorest. Beneficiaries also had higher asset values and incomes than nonbeneficiaries, although the contribution of the fish farming activity to these was insignificant. This means that these households were already better-off prior to the program and not necessarily as a consequence of service delivery. The paper concludes with the need for relative poverty assessments prior to service delivery for improved targeting and outreach performance, while considering the additional costs involved.
Using panel data to estimate the effect of rainfall shocks on smallholders food security and vulnerability in rural Ethiopia
(2009) Zeller, Manfred; Demeke, Abera Birhanu
Ethiopia's agriculture is predominantly rainfed and hence any irregularity in weather conditions has adverse welfare implications. Using panel data, this paper analyzes the effect of rainfall shocks on Ethiopian rural households' food security and vulnerability over time while controlling for a range of other factors. To this end, we generated a time-variant household food security index which is developed by principal components analysis. Based on the scores of the index, households were classified into relative food security groups and their socioeconomic differences were assessed. The exploratory results show that compared to the less secured households, the more secured ones have male and literate household heads, tend to have a greater number of economically active household members, own more livestock, experience better rainfall outcome, participate in equb (a local savings group), and use chemical fertilizer. Fixed effects regression was used to identify the factors which affect the score's variability and the results indicate that rainfall shock is an important factor affecting households' food security over time. It is also noted that household size, head's age, participation in equb, off-farm activities, use of fertilizer, and livestock ownership positively and significantly affect the food security score. Results from multinomial logistic regression model reinforce the fixed effects regression results by showing the strong association of persistent food insecurity and vulnerability with adverse rainfall shock. A number of conclusions can be drawn from the results which are useful for policymakers as well as for agencies that engage in areas of risk and food security.
Targeting the poor and smallholder farmers : empirical evidence from Malawi
(2009) Houssou, Nazaire; Zeller, Manfred
This paper develops low cost, reasonably accurate, and simple models for improving the targeting efficiency of development policies in Malawi. Using a stepwise logistic regression (weighted) along with other techniques applied in credit scoring, the research identifies a set of easily observable and verifiable indicators for correctly predicting whether a household is poor or not, based on the 2004-05 Malawi Integrated Household Survey data. The predictive power of the models is assessed using out-of-sample validation tests and receiver operating characteristic curves, whereas the model?s robustness is evaluated by bootstrap simulation methods. Finally, sensitivity analyses are performed using the international and extreme poverty lines. The models developed have proven their validity in an independent sample derived from the same population. Findings suggest that the rural model calibrated to the national poverty line correctly predicts the status of about 69% of poor households when applied to an independent subset of surveyed households, whereas the urban model correctly identifies 64% of poor households. Increasing the poverty line improves the model?s targeting performances, while reducing the poverty line does the opposite. In terms of robustness, the rural model yields a more robust result with a prediction margin ±10% points compared to the urban model. While the best indicator sets can potentially yield a sizable impact on poverty if used in combination with a direct transfer program, some non-poor households would also be targeted as the result of model?s leakage. One major feature of the models is that household score can be easily and quickly computed in the field. Overall, the models developed can be potential policy tools for Malawi.
Linkages between poverty and sustainable agricultural and rural development in the uplands of Southeast Asia
(2008) Zeller, Manfred; Beuchelt, Tina; Fischer, Isabel; Heidhues, Franz
Most of the upland areas of Southeast Asia are characterized by insufficient infrastructure, low productivity in smallholder crop and animal production, mounting environmental problems such as soil and forest degradation and loss of biodiversity, increasing population pressure, and widespread poverty, particular in rural areas. While some upland areas in South East Asia have been experiencing considerable progress during the past twenty years, others have stagnated or even declined with respect to economic, social and environmental objectives of development. The purpose of the paper is to describe major trends regarding sustainable development in the upland areas of selected countries in South East Asia, and review explanatory approaches for the observed trends based on case studies from Cambodia, Laos, Thailand, Vietnam, and Indonesia. The conceptual framework for this paper builds on the critical triangle of sustainable rural development. Here, equity or poverty alleviation, economic growth, and the protection of the environment are the three major policy objectives. We further distinguish three explanatory approaches for land use change and agricultural and rural development. Apart from the market approach and the population approach, we suggest that future studies should focus more on governance issues as a major driving force of land use change. The governance approach appears particularly relevant for upland areas which are often politically and institutionally marginalized. The paper begins with a review of definitions of sustainability, and proceeds with a conceptual analysis of the two-way linkages between poverty and the environment, and poverty and economic growth in rural areas. This is followed by empirical findings from research on agriculture and forestry as the major land uses in upland areas of selected South East Asian countries. Based on the results of different case studies from Cambodia, Laos, Vietnam and Indonesia, we seek to contrast stories of relative success with those of failure. The paper concludes with implications for rural and agricultural development policies, and suggests future areas of research.
Insurance preferences of smallholders : results from an adaptive conjoint analysis in Northern Vietnam
(2008) Buchenrieder, Gertrud; Fischer, Isabel
Livestock plays a pivotal role for smallholder production systems in mountainous Northern Vietnam. Poor rural farm households are vulnerable and their livelihood systems are often so fragile and finely-balanced that a small misfortune can destabilize the households for many years. Economic risks, especially loss of livestock, are one of the major reasons for slipping into poverty. Normally, insurance systems could step in here. In developing countries however, insurance markets are usually underdeveloped. Empirical research reveals that raising livestock and selling it in case of a livelihood emergency is a particularly popular risk management strategy. Based on the results of a computer-based Adaptive Conjoint Analysis (ACA) with 155 responding households of different ethnic minority groups in Son La and Bac Kan provinces of Northern Vietnam, this article examines insurance preferences of rural farm households. In general, smallholders are very interested in livestock insurance. The ?insured animal? is the most important attribute for all respondents and the buffalo is the highest valued animal. However, the critical issue is how to design the insurance package. It is argued that the provision of adapted livestock insurance could help decreasing household vulnerability by a forward looking risk management strategy. Insurance preferences of smallholders are presented and policy recommendations are given to improve the overall situation of vulnerable households in mountainous Northern Vietnam.
Land titling policy and soil conservation in the uplands of Northern Vietnam
(2008) Dung, Pham Thi My; Saint-Macary, Camille; Keil, Alwin; Zeller, Manfred; Heidhues, Franz
In Vietnam, a quasi private property regime has been established in 1993 with the issuance of exchangeable and mortgageable long term land use right certificates. Using primary qualitative and quantitative data collected in a mountainous district of Northern Vietnam, this paper investigates the role of the land policy in the adoption of soil conservation technologies by farmers. This issue is of crucial importance in the region where population growth and growing market demands have induced farmers to intensify agricultural production. While poverty has been reduced, environmental problems such as soil erosion, landslides, and declining soil fertility have become more severe over the past years. Among the abundant literature on the impact of property rights and formal land titles in developing countries, only a few studies have focused on the adoption of soil conservation technologies: an important element in sustainable development strategies of fragile agro-ecological areas confronted with increasing population densities. Our findings suggest that soil conservation technologies are perceived as being economically unattractive; therefore, most upland farmers continue to practice the prevailing erosion-prone cultivation system. Focusing on agroforestry as one major soil conservation option, we estimate household and plot level econometric models to empirically assess the determinants of adoption. We find that the possession of a formal land title influences adoption, but that the threat of land re-allocations in villages discourages adoption by creating uncertainty and tenure insecurity. We conclude that more efforts are needed from decision-makers to promote and support the adoption of conservation practices and to clarify objectives of the land policy in order to secure land tenure and foster sustainable development in fragile areas.
Maize boom in the uplands of Northern Vietnam : economic importance and environmental implications
(2008) Zeller, Manfred; Saint-Macary, Camille; Keil, Alwin
In Vietnam, the demand for meat products has grown dramatically due to rapid economic growth and urbanisation and is expected to further increase in the future. Being the primary source of feed for the country?s livestock and poultry industry, maize has become the second most important crop after rice. While this maize boom has the potential to reduce rural poverty, it promotes the expansion of agricultural cultivation into fragile agro-ecological zones, often leading to deforestation and soil degradation, especially in the uplands. Using empirical evidence from mountainous Yen Chau district in north-western Vietnam, the objective of this paper is to investigate the current economic importance and environmental implications of maize cultivation. Furthermore, particular emphasis is placed on the identification of factors influencing farmers? decision how much area to allocate to maize in order to derive research and policy recommendations. Maize is the dominant crop in Yen Chau, covering most of the uplands and generating the lion?s share of households? cash income. Although farmers are well aware of soil erosion on their maize plots, effective soil conservation measures are rarely practiced. Maize is attractive to farmers from all social strata, notably the poor, and through marketing arrangements with traders its cultivation is also not constrained by poor infrastructural conditions. Access to low-interest credit should be enhanced to mitigate farmers? risk of being caught in a poverty trap when maize revenues plummet due to pests, diseases, price fluctuations, or adverse weather conditions. To address the problem of soil degradation in the maize-dominated uplands, research is needed on soil conservation options that are economically more attractive than those promoted thus far.
Payments for environmental services : incentives through carbon sequestration compensation for cocoa-based agroforestry systems in Central Sulawesi, Indonesia
(2008) Zeller, Manfred; Seeberg-Elverfeldt, Christina; Schwarze, Stefan
Up to 25 percent of all anthropogenic greenhouse gas emissions are caused by deforestation, and Indonesia is the third largest greenhouse gas emitter worldwide due to land use change and deforestation. On the island of Sulawesi in the vicinity of the Lore Lindu National Park (LLNP), many smallholders contribute to conversion processes at the forest margin as a result of their agricultural practices. Specifically the area dedicated to cocoa plantations has increased from zero (1979) to nearly 18,000 hectares (2001). Some of these plots have been established inside the 220,000 hectares of the LLNP. An intensification process is observed with a consequent reduction of the shade tree density. This study assesses which impact carbon sequestration payments for forest management systems have on the prevailing land use systems. Additionally, the level of incentives is determined which motivates farmers to desist from further deforestation and land use intensification activities. Household behaviour and resource allocation is analysed with a comparative static linear programming model. As these models prove to be a reliable tool for policy analysis, the output can indicate the adjustments in resource allocation and land use shifts when introducing compensation payments. The data was collected in a household survey in six villages around the LLNP. Four household categories are identified according to their dominant agroforestry systems. These range from low intensity management with a high degree of shading to highly intensified shade free systems. At the plot level, the payments from carbon sequestration are the highest for the full shade cocoa agroforestry system, but with low carbon prices of ? 5 tCO2e-1 these constitute 5 percent of the cocoa gross margin. Focusing on the household level, however, an increase of up to 18 percent of the total gross margin can be realised. Furthermore, for differentiated carbon prices up to ? 32 tCO2e-1 the majority of the households have an incentive to adopt the more sustainable shade intensive agroforestry system. A win-win situation seems to appear, whereby, when targeting only the shade intensive agroforestry systems with carbon payments, the poorest households economically benefit the most and land use systems with high environmental benefits are promoted.
Use of household food insecurity scales for assessing poverty in Bangladesh and Uganda
(2008) Alcarez V., Gabriela; Zeller, Manfred
An important dimension of poverty is access to food. Household food security implies access to the food needed for a healthy and productive life. Lack of access to and/or impaired utilization of food contribute to household food insecurity. This study compares the usefulness of a standardized food insecurity scale for determining the food insecurity status of rural and urban households in Bangladesh and Uganda, and for predicting poverty status. The analysis uses data from the IRIS Composite Survey Household Questionnaire (2004), which consists of 1,587 households (approximately 800 households in each country). The coping mechanisms adopted in the presence of food shortages represent the building blocks for the development of the scale (7 items). In order to assess the suitability of the scale as an estimator of the households? poverty status, the benchmark indicator ?daily expenditures per capita? and its relation to the corresponding poverty line serves as the basis for evaluation for each country. The scale provides the means for classifying the households into 3 main groups: Non Food Insecure, Moderately Food Insecure, and Severely Food Insecure. The reliability of the scale is measured via the Cronbach?s Alpha statistic. In addition, the scale is used in regression analysis in order to predict per capita daily expenditures and the poverty incidence. The results show that food insecurity does not always reflect (income) poverty. However, the use of the scale as a predictor of poverty status produces rough estimates of poverty incidence that could be useful as background information. The differentiation of households according to their food security status may be valuable for focusing and developing improved food insecurity mitigation strategies.
Can genetic engineering for the poor pay off? : an ex-ante evaluation of Golden Rice in India
(2006) Qaim, Matin; Sachdev, H. P. S.; Stein, Alexander J.
Genetic engineering (GE) in agriculture is a controversial topic in science and society at large. While some oppose genetically modified crops as proxy of an agricultural system they consider unsustainable and inequitable, the question remains whether GE can benefit the poor within the existing system and what needs to be done to deliver these benefits? Golden Rice has been genetically engineered to produce provitamin A. The technology is still in the testing phase, but, once released, it is expected to address one consequence of poverty ? vitamin A deficiency (VAD) ? and its health implications. Current interventions to combat VAD rely mainly on pharmaceutical supplementation, which is costly in the long run and only partially successful. We develop a methodology for ex-ante evaluation, taking into account the whole sequence of effects between the cultivation of the crop and its ultimate health impacts. In doing so we build on a comprehensive, nationally representative data set of household food consumption in India. Using a refined disability-adjusted life year (DALY) framework and detailed health data, this study shows for India that under optimistic assumptions this country?s annual burden of VAD of 2.3 million DALYs lost can be reduced by 59.4% hence 1.4 million healthy life years could be saved each year if Golden Rice would be consumed widely. In a low impact scenario, where Golden Rice is consumed less frequently and produces less provitamin A, the burden of VAD could be reduced by 8.8%. However, in both scenarios the cost per DALY saved through Golden Rice (US$ 3.06-19.40) is lower than the cost of current supplementation efforts, and it outperforms international cost-effectiveness thresholds. Golden Rice should therefore be considered seriously as a complementary intervention to fight VAD in rice-eating populations in the medium term.
Potential impacts of iron biofortification in India
(2006) Bhutta, Zulfiqar A.; Stein, Alexander J.; Qaim, Matin; Meenakshi, J. V.; Nestel, Penelope; Sachdev, H. P. S.
Iron deficiency is a widespread nutritional problem in developing countries, causing impaired physical activity and cognitive development, as well as maternal mortality. Although food fortification and supplementation programmes have been effective in some countries, their overall success remains limited. Biofortification, that is, breeding crops for higher micronutrient content, is a relatively new approach. We propose a methodology for ex-ante impact assessment of iron biofortification, which builds on disability-adjusted life years (DALYs) and a large household data set. Our analysis of iron-rich rice and wheat in India indicates sizeable potential health benefits. The cost-effectiveness of iron biofortification compares favourably with other interventions.
Vitamin A and iron consumption and the role of indigenous vegetables: a household level analysis in the Philippines
(2006) Weinberger, Katinka; Qaim, Matin; Ecker, Olivier; Hönicke, Mireille
Micronutrient malnutrition is a public health problem in many regions of the developing world. Severe vitamin A and iron deficiencies are of particular concern due to their high prevalence and their serious, multiple health effects on humans. This paper examines dietary patterns and nutrient intakes, as well as their socioeconomic determinants among households in the Philippines. Since promotion of indigenous vegetables is often considered as an avenue to reduce micronutrient malnutrition, special emphasis is placed on analyzing the contribution of this particular food group to household vitamin A and iron intakes. We use a sample consisting of 172 resource-poor households located in peri-urban areas of Laguna Province. A 24-hour food consumption recall allows for detailed, meal-specific examination of diets. Results of the dietary analysis suggest that fish is of major importance for vitamin A and iron intakes. But also vegetables, and especially indigenous vegetables, play an essential role for balanced household diets. In order to determine socioeconomic factors influencing vitamin A and iron intakes, we employ an econometric model, which shows that deficiencies are strongly associated with low household incomes and poverty. Thus, poverty alleviation will help reduce the problem of micronutrient malnutrition in the medium and long run. However, in the interim, more targeted interventions will be needed. Our results suggest that promotion of indigenous vegetables can play a role in this respect, especially among the poor, who can often not afford sufficient amounts of animal products.
Agricultural sciences in upland Northern Vietnam : situating research in a dynamic environment
(2006) Friederichsen, Rupert
This paper aims to provide an introductory overview over the socio-cultural context of Northern Vietnam to agricultural researchers. The paper focuses on the interplay between Vietnam?s lowlands and the uplands to specify what makes the Northern uplands a distinct region; as an object of empirical agricultural research and as a context of application of research results. The paper reviews the developments of selected social institutions from pre-colonial times to the current era of ?renovation?. First, developments in Vietnam?s legal and administrative structures are outlined. Second, education and higher education, particularly the agricultural sciences, are discussed. The third and main part elaborates on social, political, and economic specifics of the Northern Uplands. It is suggested that the relationship between formal and informal institutions is crucial for understanding the dynamics of contemporary uplands Vietnam, particularly in the given multi-cultural situation.
Land property, tenure security and credit access: a historical perspective of change processes in China
(2006) Jia, Xiangping; Piotrowski, Stephan
The North China Plain is the country?s granary: most of wheat and maize is supplied by this region in the northeast of China. Intensity of agricultural production has risen sharply in the last decades and the negative environmental effects like water scarcity, salinization and nitrate contamination have been widely acknowledged. In the wake of the country?s rapid economic development it becomes at the same time more and more urgent to narrow the gap between the well-being of the urban and rural population. In order to better understand the paths that lead to this present dilemma, this paper provides a historical overview of the development of the land and water markets and the rural financial system. It highlights the linkages and reciprocal restraints between these three sectors and gives some conclusions and policy recommendations on how to proceed in order to further a more sustainable development in the North China Plain. Apart from literature review, data from an original farm household survey, conducted by the authors, is used to substantiate the arguments put forth in this paper.
Debt position of developing countries and new initiatives for debt reduction: a panel data fixed effects estimation of the impacts of the HIPC initiatives
(2005) Houssou, Nazaire; Heidhues, Franz
In September 1996, the World Bank and the International Monetary Fund launched the Heavily Indebted Poor Countries Initiative (HIPC). This initiative was endorsed by 180 governments around the world as an effective and welcome approach to help poor, severely indebted countries reduce debt as a part of the overall poverty reduction strategy. Three years later, the initiative was enhanced to provide for faster, broader and deeper debt relief. Using a panel data fixed effect estimation, this study assesses the achievements of the first and second HIPC initiatives and explores further areas of intervention that might help the HIPCs graduate from debt rescheduling and achieve sustainable growth and poverty alleviation. Despite moderate achievements of the HIPC measures so far, this paper argues in favour of a HIPC III initiative. Much more relief is needed to link debt reduction to poverty alleviation if the expectations raised by the HIPC initiatives are to become reality.
Outreach of credit institutes and households' access constraints to formal credit in Northern Vietnam
(2005) Dufhues, Thomas; Buchenrieder, Gertrud
Abstract Most policy and research interest regarding rural credit markets revolves around the perception that poor households in developing countries lack access to credit, which is believed to have negative consequences for household welfare. An important feature of the rural credit market is that access to credit is easier for some groups than for others. The Vietnamese government supplied credit on preferential terms, particularly to rural households, throug state-owned financial intermediaries. The share of the informal sector was thus considerably reduced from 78% (1992/93) of all outstanding loans to 54% (1997/98) in favor of the formal sector. However, there is evidence from other developing countries that credit constraints persist despite the expansion of rural finance. Hulme and Mosley (1996) state that there is increasing evidence that the poorest 20% of the population are excluded from rural credit programs. Thus, even in Vietnam the question remains: did the Vietnamese government succeed in reaching the poor, or do groups of people exist who are still access-constrained? Quantitative (N=260) and qualitative data collection took place between March 2000 and 2001. The quantitative data comprise cross-sectional household-level data from two different districts in Northern Vietnam. The poverty outreach of formal rural lenders was analyzed using Principal Component Analysis, while access to formal credit was investigated using a binary logit analysis. The poverty outreach of the formal lenders is quite satisfactory since about 50% of all predominantly poor rural households have access to formal credit. However, the poorest households are seldom clients of formal lenders. Yet, it is not their extreme general poverty that determines their access to formal credit. The results indicate that only certain aspects of poverty, e.g. low quality of housing, have an important influence on access to formal credit in Vietnam. The poorest households simply have much less demand for formal credit. Offering new credit products would only slightly improve the credit coverage of poorer households. More promising would be a specialized pro-poor extension service to widen the scope of their investment ideas and possibilities, combined with general improvement of the infrastructure. All in all, the most appropriate tool to incorporate poorer households into the formal financial system would be mobilization of savings. Nevertheless, the number of access-constrained households is surprisingly low. One reason for the low number is the weakening or eradication of former access constraints. Some acces barriers do still exist, e.g. towards ethnic minorities or female-led households. To reduce these access barriers, the actions to be taken should be catering to the specific needs and the circumstances of those households that lack access.
Towards demand-driven financial services in Northern Vietnam: a participatory analysis of customer preferences
(2003) Dufhues, Thomas Bernhard
Analyzing secondary and primary data, this paper suggests a shift in national development policies from solely promoting rural credit to supporting savings activities. The household data are econometrically analyzed applying the Conjoint Analysis (CA). The CA gave valuable insights into how to improve outreach of formal financial institutes (FFIs) by adapting the credit products to client preferences and revealed an unattended demand for savings instruments. Due the enormous credit outreach of the FFIs in Vietnam, it would be more efficient to launch a credit consolidation policy and to implement a reliable and sustainable deposit collection system at the village level. However, in national policymaking a paradigm change must take place and the capability of rural households to save needs to be recognized by policy-makers.

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