Research examines protection against extreme drought in two African nations
Jonathan Malacarne, a sixth-year Ph.D. candidate in agriculture and resource economics, is in charge of the Mozambique component of a project that studies the “impacts of drought-tolerant maize seed and satellite-based index insurance on small farmer welfare in Mozambique and Tanzania.” The project was originally engineered by three UC Davis professors in the agriculture and resource economics department: Associate Professor Steve Boucher, Professor Michael Carter and Professor Travis Lybbert.
The drought-tolerant seeds were developed by CIMMYT, the International Center for the Improvement of Maize and Wheat and the research project’s biggest partner, to narrow the window of time the maize plant is vulnerable to yield losses due to drought. Malacarne works with the Assets and Market Access (AMA) Innovation Lab at UC Davis, a research group that “conducts and supports research on policies and programs designed to help poor and smallholder farmers worldwide to manage risk, adopt productive technologies and take an active part in economic growth.”
Malacarne discussed many of the challenges associated with making agricultural insurance available to small farmers.
“Whenever you’re in rural Mozambique and rural Tanzania, and the thing you’re trying to insure is one hectare of maize, it’s just not worth the insurance company’s time to send somebody to go check if there was a loss,” Malacarne said. “It’s a really big burden on small farmers to have to try to identify when a drought occurred because it’s kind of this cumulative thing — it’s reversible up to a point, and then it’s not all of a sudden.”
These challenges have resulted in agricultural insurance failing in poor rural areas, according to Malacarne. In contrast, the research project deals with a different type of insurance called “index insurance.” This insurance includes payments that are tied to external indexes, such as the average yield among all farmers in an area, rather than the yields of an individual area.
“So, if average yields in a whole area are low, then everybody gets a payment — you don’t have to report anything,” Malacarne said. “There’s no need to send somebody to your individual plot because what happens on your plot is hopefully correlated with that index.”
Satellites help create statistical models that predict maize yields, which are then used to predict whether a harvest will be of good quality, according to Malacarne. The research project focuses on the manufacturing of an insurance product that is complementary to the protection the drought-tolerant maize seeds offer.
“We let the drought-tolerant maize seed do what it does best, which is protect against moderate drought, and then we use satellites to look for early season drought or really bad rainfall over a full year, and that lets us better protect farmers and do it more cheaply because we’re letting the biology take some of the risk away,” Malacarne said.
Malacarne and his team work with local seed companies “to help them expand their marketing efforts” and get the improved, drought-tolerant seed into the hands of farmers. To prove the efficacy of the seed, researchers randomize the areas that will be given the researchers’ support. This helps validate the findings of the project, which involves collecting household surveys from areas that receive the help as well as those that have not been randomly selected.
“I think our seed company partners have sold drought-tolerant maize seed to something like 6,000 or 7,000 households, [and] probably a little less than half of those purchased the insurance component with the seed,” Malacarne said. “In Mozambique, the years that we were running the project were pretty good years in terms of rain, so they had the insurance, and [the farmers] may have been able to invest a bit more because they knew they were protected, but there weren’t any bad years, so there weren’t any insurance payments.”
Analysis on the insurance component of the project is delayed because there have not been many severe droughts in Mozambique in recent years.
“It’s tough to learn about insurance because you want people to have good years all the time,” Malacarne said. “But, in order to learn about insurance, you need some bad things to happen.”
The Tanzania project is run by Laura Paul, a sixth-year Ph.D. candidate in agricultural and resources economics. The index insurance component is distributed by measuring precipitation to determine if there’s a payout, according to Paul.
“The drought-tolerant maize has this sort of biological resilience to drought, so that feature makes it less expensive to insure,” Paul said. “The hope was that, with this complete protection, farmers would be more likely to adopt the technologies in combination. Previous research has found that, generally, adoption of these two things is pretty low, so this was one way of looking at if we could increase adoption of these two thing[s] that we think will help people’s welfare that don’t really seem to be preferred by farmers when they’re alone.”
Paul and her team experienced “significant buy-in from the Tanzanian government” for the project, a crucial element for the success of the research. The team created partnerships with Tanzanian seed companies and insurance companies and worked on the design of the insurance intended to complement the drought-resistant seeds.
“One major difference between Tanzania and Mozambique was that I never locally sold the seeds,” Paul said. “I trained local seed sellers to sell the seeds or to have access to the seeds. I hired about 15 people every year to collect data for me, who were all people who were affiliated with either the Tanzanian Agricultural Resource Institute or a major Tanzanian university. I was able to actually find people who could sell the seeds — those people didn’t exist in the same way in Mozambique.”
Although both Paul and Malacarne had to overcome many challenges in order to establish a system of getting the seeds in the hands of farmers, the challenge remains of ensuring that the structure built will remain.
“Our biggest issues were ones of building that network and trying to maintain it,” Paul said. “That’s hard to do when I don’t necessarily have someone on the ground who can constantly supervise all the different activities that are happening related to the project, especially when I’m working in 90 villages.”
Aniceto Matias, the field manager of the project in Mozambique, was responsible for the day-to-day operations. The project was a success in Mozambique because many farmers in rural Mozambique “had no access and did not use improved maize seeds, especially the drought-tolerant varieties,” according to Matias.
“In Mozambique the issue of insurance is still a little-used thing even in the rural areas where it has [a] greater number of literate people,” Matias said via email. “The issue of promoting these varieties by selling at a subsidized price has greatly helped small farmers to start using drought tolerant seed. I still get phone calls from producers that show interest in seeing the project continue.”
Written by: Sabrina Habchi — email@example.com