Enabling poor rural people
to overcome poverty
This paper reviews IFAD’s activities in Guatemala and analyses their
effects on household food security and the status of women. It also develops
and discusses an indicator of household vulnerability to food insecurity,
based on a detailed analysis of IFAD project data.
In spite of a sufficient food supply, hunger and malnutrition persist in many areas of the world. The shift in the HFS paradigm that took place during the past decade is the result of increased awareness that the reason for food insecurity must be sought in the erosion of household and individual entitlements, instead of in insufficient food supplies. Many households do not have sufficient means to access food, and even when they do have them, those means are often limited and highly insecure.
Projects implicitly or explicitly concerned with food security have emphasized income-generation as a means by which to challenge hunger and malnutrition. However, an adequate level of household income is not a sufficient guarantor of stable and sustainable household and individual food intake. Differences in income composition and the risk those differences entail are equally important in the assessment of HFS. Furthermore, resource control and allocation considerations within households can considerably alter an assessment of HFS.
The main goal of this paper is to build upon previous efforts geared towards the operationalization of the concept of household food insecurity by incorporating risk and intrahousehold considerations. To this end, a simple indicator of vulnerability is proposed that combines the notion of food access with concepts of risk of, and insurance against, entitlement failure. Using data collected in two IFAD-funded rural development projects in Guatemala, the paper evaluates the impact of project activities on HFS and on the role of women.
The complexity of the HFS concept often causes ambiguity with respect to the choice of a specific instrument for targeting the most vulnerable. The breadth of the findings illustrates the importance of targeting interventions that are based on local conditions and idiosyncratic household needs. The data reveal that customized instrumentalities are necessary in order for projects to reach the poorest of the poor, especially when the economic incentive associated with certain programmes is more likely to benefit wealthier recipients. Special funds may be required to implement direct instrumentalities, so as to complement the projects’ productive investment efforts, which are, by their nature, less likely to reach the neediest.
Many poor rural households still appear to allocate more resources to low-productivity food production than can be accounted for by efficiency and comparative advantage criteria. This pattern may be a response to market failures related to idiosyncratic transaction costs. Alternatively, it may signal high risk aversion, in the absence of formal insurance markets. In either case, the promotion of profitable but risky market ventures may not produce the desired impact, nor reach the neediest, until these market imperfections and failures are removed.
The projects’ efforts, mainly in the form of credit and technical assistance programmes, appear to have been instrumental in improving access to income-generating activities among their beneficiaries. However, in spite of substantial average improvements in income in many communities, project beneficiaries often continue to exhibit highly risky HFS strategies. Diversification of income sources and agricultural production remain cornerstones in a rural household's strategy to cope with uncertainty in relation to access to food. The strikingly low levels both of income and of agricultural diversification documented by the data suggest clear entry points for projects with an explicit interest in food security. The promotion of direct instrumentalities, such as micro-irrigation projects and vegetable gardens, may be required in some instances to target the most food insecure communities and households, and to expand their crop portfolio.
The data revealed strikingly low levels of income diversification for many households in the surveyed communities. Excessive reliance on single sources of income or on very few crops creates an exponential increase in a household’s risk of entitlement failure, and impairs its resilience in the event of food shortages. This calls for a renewed focus on risk and insurance in poor households’ coping strategies, as opposed to income-generation alone. To this end, IFAD projects must act as catalysts in promoting risk-reducing instrumentalities, particularly when increasing risk through the promotion of income-generating activities. The parallel promotion of instruments that reduce risks would also serve to increase the adoption rates of profitable but risky income-generating ventures by the poorest of the poor. This approach would thereby improve both targeting and compliance with IFAD mandates.
A more vigorous support of marketing activities must complement the current project efforts in support of the production of market commodities. Participation in IFAD projects appears to be positively correlated with women’s involvement in income-generating activities. However, this involvement has not always translated into substantial income increases for women. The success of the promotion of income-generating activities is likely to be conditional on the targeted population’s maintaining control over a fair share of the income generated. This principle applies to the household and to individual household members. If IFAD wishes to maximize the impact of its productive investments, it must provide strong support in marketing so that its beneficiaries retain the rewards of their work. The data reveal that women often lose control over the resources they generate, presumably because they are not directly involved in marketing those products. In other instances, returns are low because of excessive competition and grossly undeveloped markets.
The diffusion of knowledge from past experiences in Guatemala, the promotion and coordination of farmer groups, and the creation of price-stabilization schemes are some of the measures recommended for projects that rely on the promotion of non-traditional agro-exports (NTXs) as a poverty alleviation and food-security instrumentality. Small NTX producers appear to be especially exposed to uncertain markets and the vagaries of powerful agro-exporters. Consequently, they tend to face extremely uncertain returns, and to capture only insignificant shares of the added value they generate with their production.
As noted, the projects have been instrumental in promoting women’s involvement in market activities. But because of the dual role women play, they are often overburdened with work. Their greater participation in on-farm labour and/or market activities is not likely to release them from long hours of home chores. Projects must therefore keep an eye on the potentially negative externalities affecting nutrition security in the long run: overburdening women with excessive workloads could bring about changes in the quality of their diets and/or deterioration in their health.
In order to comply with IFAD’s mandate and renewed focus on nutrition security, the Fund’s projects must continue to seek the cooperation of other development institutions in a combined effort to reduce the vulnerability of poor households to food insecurity. The success of food-related programmes lies in maximizing synergies among those factors presumed to affect food and nutrition security. This can be achieved by complementing current productive investments of IFAD projects with other types of institutional support and programmes (e.g., NGOs, other specialized United Nations agencies, government) geared towards health and sanitation improvements and human resource development.
While improved access to credit provides a valuable mechanism for promoting income-generating activities, the projects must pay close attention to the possibility of by-passing the neediest with these types of programmes. The economic incentives behind productive credit programmes are less likely directly to benefit less-endowed households and individuals. In addition, in the absence of safety nets, access to loans may expose these groups to excessive risks, ultimately rendering them more vulnerable to food insecurity than before.
