Funding Farmers to innovate: Evidence from Randomized Control Trial in Ethiopia Work in Progress Niklas Buehren, Markus Goldstein, Tigist Ketema, and Amare Teklu Draft. Please do not cite or circulate without permission of the authors.

Farmer Innovation Fund(FIF) Sub-component of Rural Capacity Building Project (RCBP) – RCBP: Assist Ethiopia to strengthen agricultural extension services and make it more responsive to clients’ needs Objective: – Providing funds directly to farmer groups for implementing innovative ideas developed and partially funded by the groups themselves Aims – To Shift the responsibility of identifying problems and solutions to farmers – To decentralize funding from the woreda to the farmer training center (FTC) level

Intervention I Self-selected groups in kebele form around an innovative idea – innovative identified as some activity not included in existing extension scope – 7 areas: crop, NRM, fruit & veg, livestock, poultry, apiculture, and off-farm – e.g. multiply improved seeds or get a South African breed of sheep for cross-breeding – Each group is composed of farmers and the maximum funding per group is 3000 Birr (~220 USD at the time)

Intervention II DA helps set things up & (theoretically) provides support going forward Proposals screened by the DAs and woerda officials on 3 criteria – Innovativeness of the idea – Absence of resources for the idea through regular extension work – Promise of a high economic return

Evaluation Design Focus on two regions: Amhara(19 kebeles) and Tigray(32 kebeles) After proposals were accepted, the WB team randomly selected the treatmen t and control group. Intensity: Overall 45% (~50% in Amhara & ~38% in Tigray Amhara 119 proposals (2 to12 per kebele) 59 treated (1 to 6 per kebele) Tigray 90 proposals (1to 6 per kebele) 34 treated (0 to 3 per kebele)

Data Baseline: August-September, 2010 → Sample size: 2,675 households Follow-up: March-April, 2012 → 2,489 baseline households resurveyed in order to create a panel data set (attrition rate of 7%)

FIF: Descriptive Analysis I

FIF: Descriptive Analysis II

Estimation – Estimate difference-in-difference, OLS

Results – by HH head gender I

Results – by HH head gender II

Results – by group composition I

Results – by group composition II

Results – by group activity I

Results – by group activity II

Farmers Innovation Fund Summary I Aggregate effects look, if anything, negative Heterogeneity shows some interesting potential – Gender of HHH Female head HH: more asset & production equipment, access to electricity Male head HH: Significant reduction in fertilizer use – Group type: Decline in use of fertilizer is driven by off-farm & fruits & veggie groups Crop-more income, Off-farm-more expenditure on house improvement & improved seed, Poultry - more livestock income, Livestock- more improved seeds More loan by poultry, apiculture & off-farm

Farmers Innovation Fund Summary II Gender of the group → Male only groups:  Benefited more from the agricultural extension service  Diversified their income source and Owned more livestock unit  More loan as a group → Female only groups  More income from crop sale & spend more on house improvement In general: although it is early stage, male farmers seems more benefited from extension service while women are becoming richer

Way forward… Interval covers only one farming year Next step: another follow-up survey to see the full impact

Thank you!