Subsidizing Learning About Resilience-building Agricultural Technologies in Mozambique

Mozambique

Resilience-building agricultural technologies help rural households withstand and recover from climate-related disasters. However, sustaining the adoption of these technologies is a challenge, partially because their largest benefits are not visible every year. This MRR Innovation Lab project in Mozambique is testing short-term subsidy and training programs that help rural households learn about the benefits offered by bundling stress-tolerant maize with index insurance. The project contributes evidence on how to spark lasting adoption for resilience-building technologies.

Project Overview

Lead Principal Investigator: Jonathan Malacarne, University of Maine

Project Partners: Centro de Estudos de Políticas e Programas Agroalimentares (CEPPAG), Universidade Eduardo Mondlane; Hollard Insurance; UC Davis 

Development Innovation: Subsidies for learning about insured drought-tolerant maize seeds

Commodity: Maize

Targeted Population: Small-scale farmers

Country/Location: Mozambique, Manica Province

Timeline: 2022-2025

Funding: $976,296 (USAID)

The Challenge

Amid the increasing risk of climate-related disasters like drought, a number of new agricultural technologies offer promising ways for small-scale farming families in developing countries to increase their resilience. Both drought-tolerant maize and index insurance have proven benefits, but by design their main benefits only come in the event of moderate or severe losses, which do not happen every year. The absence of consistency complicates promotion of sustained use among the households these technologies can most benefit. Index insurance products, for example, often see limited demand in the absence of generous subsidies, and are frequently dropped if households do not receive insurance payouts in their first few years of experimentation.

From 2015-2018, a research team led by UC Davis designed and tested a bundle of drought-tolerant maize, developed by CIMMYT, and agricultural index insurance that provided a seed-replacement guarantee.[1] In the bundle, the stress-tolerant maize protected yields from moderate mid-season drought, while the index insurance protected household investment in the case of severe drought. As a result, farmers who purchased the bundled product and experienced severe drought were able to recover quickly, even increasing their yields in the following season. In spite of these substantial benefits, the challenge of sustaining adoption remains. Farmers who purchased the bundle but did not experience moderate or severe drought tended to reduce their investment in subsequent seasons.

Since the conclusion of the project, private sector partners in Mozambique have scaled up the bundle in partnership with NCBA CLUSA and with support from USAID.[2] The commercial availability of a bundled product of drought-tolerant maize and index insurance offers an opportunity to test focused approaches to spark lasting adoption and to add to evidence of the bundle’s impact.

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Research Design

This project in central Mozambique uses a randomized controlled trial (RCT) to test two approaches to building lasting adoption of drought-tolerant maize seed bundled with index insurance. The two approaches seek to subsidize learning in different ways. The first approach targets learning-by-doing by providing a voucher that reduces the cost to purchase the insured seeds. The second approach targets learning that can take place without direct experimentation through community-based educational sessions and tablet-based games that highlight how the insured seeds reduce overall vulnerability to drought.

The research team is also considering how household gender dynamics interact with technology adoption decisions. In order to better understand women’s role in maize farming decisions, a subset of educational sessions include additional content to frame the benefits of the bundle in ways that resonate with both husband and wife.

In addition to its research objectives, this project is deepening access to insured maize seed by collaborating with Hollard Insurance in the creation of a network of agrodealers that are registered as certified insurance agents.

Learning, and subsequently, sustained adoption, is expected to depend both on the subsidy strategy and on a household’s experience with drought. As such, the study communities are geographically dispersed to maximize variation in the drought conditions experienced within treatment groups. The research team collects data on agricultural decisions and harvest outcomes, as well as on household food security and general economic wellbeing. In order to study the learning process itself and the role of learning in decisions around technology use, surveys elicit farmers’ expected harvest from planting the insured drought-tolerant seeds compared to conventional improved varieties and local, saved varieties under a variety of weather conditions.

Development Impact

This project supports USAID objectives in Mozambique to reduce rural households’ vulnerability to drought and other shocks while also connecting them to markets. The project builds on the momentum of partners in expanding access to insured, drought-tolerant maize, while developing critical evidence on how to maximize reach and impact. Deeper understandings of learning around sustained technology adoption, and of growing women’s informed engagement in decisions, will be extremely valuable.

This project is also measuring how investments in resilience compare to relying entirely on disaster relief to protect the well-being of vulnerable, rural communities. In addition to drought, Mozambique also faces a high risk of devastating cyclones that destroy crops. The insured maize in this study, and future products that directly target cyclones, may allow farmers to invest with confidence and recover quickly if they suffer losses due to a natural disaster.

[1] Boucher, S.R., Carter, M.R., Flatnes, J.E., Lybbert, T.J.,  Malacarne, J.G.,  Mareyna, P.P, Paul, L.A., 2024, “Bundling Genetic and Financial Technologies for More Resilient and Productive Small-Scale Farmers in Africa,” The Economic Journal.
[2] Feed the Future Partnering for Innovation, 2020, “No More Risky Business: Remote Sensing Technology for Deliverinng Insured Crop Seeds in Mozambique.” Agrilinks.

 

This report is made possible by the generous support of the American people through the United States Agency for International Development (USAID) cooperative agreement 7200AA19LE00004. The contents are the responsibility of the Feed the Future Innovation Lab for Markets, Risk and Resilience and do not necessarily reflect the views of USAID or the United States Government.