Michael Carter

Michael Carter

One of the leading development economists in the world. He has worked on rural development issues throughout Africa and Latin America. His research focuses on the theoretical underpinnings of imperfections in rural factor markets, poverty dynamics and asset accumulation, and the relationships between inequality, institutional development and growth.

Carter Research

Abstract:

Bundling Innovative Risk Management Technologies to Boost the Agricultural Productivity and Food Security of Vulnerable Small Farm Households in Africa

Michael Carter, Agricultural & Resource Economics

Agricultural development interventions most often offer technologies that will, in a typical year, increase the local availability of nutritionally dense foods, or increase the incomes of rural families. In the study to be presented, we are examining the productivity and nutritional impacts of scaling up “stress-resistant” agricultural technologies designed to stabilize production and incomes in atypical or bad crop years.

First and foremost, this approach should reduce the human development losses that occur during periods of drought and other types of climatic stress that reduce incomes for both farm and landless labor families. Second, stress-resistant technologies pay a further “risk-reduction dividend,” enabling farmers to prudentially take on more risk by investing in the kind of yield increasing technologies that largely remain beyond the reach of many small farm households in broad swatches of Africa. This work thus relates directly to SDGs 2 and 3 and its importance potentially grows as continuing climate change further destabilizes weather patterns for farmers in our research areas and across many parts of the globe.

Recent years have seen the separate development of two technologies designed to help small- scale farmers manage climatic stress. The first technology is drought tolerant (DT) seed varieties developed under the auspices of the Drought Tolerant Maize for Africa program. The second is the financial technology of index insurance that we have pioneered here at UC-Davis to reliably transfer risk out of small-scale farming systems by issuing compensatory payments when climatic events occur and agricultural production collapses. While both technologies target the same problem, they work indifferent ways and offer important synergies. We are now testing these technologies and their synergies in two large scale randomized controlled trials, one in Tanzania and one in Mozambique.

After a first year in which treatment group farmers were offered the opportunity to experiment with trial packets of DT seeds provided by our seed company partners, we are now entering the next critical stage of the project in which farmers will be offered the seeds for purchase alone or bundled with a tailored index insurance contract designed to protect the farmer when DT seeds do not. The technological challenges of designing a reliable insurance index have been substantial, but we now have a reliable index based on satellite information and our insurance company partners are on board and ready to market the product (see our logo below). A severe drought in the 2015/16-crop year and political violence in Mozambique have been our most severe challenges in arriving to this stage.

Going forward, we continue to search for better ways to predict crop yields using remote sensing technologies. We also need assistance with the design and implementation of cost- effective nutrition, behavior change interventions that will make it more likely that increased and stabilized family farm incomes spill over into improved nutritional outcomes.