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General

Study Overview

Title:

Evaluation of the Effects of Introducing RiskManagement Tools in Agricultural Development: The Case of PADAER Senegal

Study is 3ie funded:

Yes

Study ID:

RIDIE-STUDY-ID-662be99a76bb9

Initial Registration Date:

04/26/2024

Last Update Date:

11/13/2023

Study Status:

Completed

Location(s):

Senegal

Abstract:

This study aims to assess the effects of risk management tools on the agricultural performance
of rural producers benefiting from the joint support of the Senegalese state and the International
Fund for Agricultural Development (IFAD) through the co-financed project PADAER.
Data collection covers two regions in Senegal: Kolda and Tambacounda. The sample comprises
1167 farmers, including 379 beneficiaries of the index-based insurance facilitated by PADAER (Programme
d’Appui au Développement Agricole et à l’Entreprenariat Rural). The quasi-experimental
method known as the propensity score matching method was used to determine the impact of subscribing
to index-based insurance on the farmer’s production, agricultural investments, and annual
income. Although the results of the estimates show that the project has not yet had any effect on
production, without the intervention of this project, farmers would have recorded a loss of about
USD 115 (FCFA 57,600). Not only did the index-based insurance for the harvest facilitated by the
PADAER allow the beneficiary to cover this loss and realize a gain estimated at USD 25 (FCFA 12,749),
but the added value of this paper is that it measures the effects of agricultural index-based insurance
in Africa using real-world statistical data.

Registration Citation:

Bonou, A.; Olapade, M.;Garbero, A.;Wantchekon, L. 2023. Evaluation of the Effects of Introducing Risk Management Tools in Agricultural Development: The Case of PADAER Senegal. Agriculture,  13, 989. https://doi.org/10.3390/agriculture13050989

Categories:

Agriculture and Rural Development

Additional Keywords:

index-based insurance; riskmanagement; agriculture; investment; propensity scorematching; Senegal

Secondary ID Number(s):

3ie Agricultural Insurance Thematic Window TW13.1049

Principal Investigator(s)

Name of First PI:

Markus Olapade

Affiliation:

Center for Evaluation and Development, D-68161 Mannheim, Germany

Name of Second PI:

Alice Bonou Fandohan

Affiliation:

National University of Agriculture

Study Sponsor

Name:

3ie Agricultural Insurance Thematic Window (TW13)

Study Sponsor Location:

India

Research Partner

Name of Partner Institution:

IFAD and CREA

Type of Organization:

Research institute/University

Location:

Italy

Intervention

Intervention Overview

Intervention:

In 2015–2016, the PADAER pilot tested the inclusion of insurance products in
seven agricultural producer organizations (POs) in the communes of Sinthiou, Maleme, and
Koussanar in the department of Tambacounda. As a side note, PADAER only proposed the
product to producer organizations (POs) and not to individual farmers. The project aimed
at supporting agricultural development and rural entrepreneurship through interventions
capable of improving farmers’ ability to produce, store, and sell agricultural products.
An index-based insurance was developed and proposed to POs. Consequently, farmers
were granted access to inputs and PADAER’s traditional services including seeds, fertilizer,
pesticides, farming equipment, agricultural extension services, and a financial weather risk
management tool.
 

Private Intervention Details:

Theory of Change:

PADAER includes the index insurance in the package of services that it delivers to its PO

Farmers subscribe to the index insurance through their respective PO

Risks reduction related to weather

Improve the food security, income of small farmers and the creation of durable employment

Multiple Treatment Arms Evaluated?

No

Implementing Agency

Name of Organization:

PADAER (Programme d’Appui au Développement Agricole et à l’Entreprenariat Rural)

Type of Organization:

Public Sector, e.g. Government Agency or Ministry

Program Funder

Name of Organization:

joint support of the Senegalese state and the International Fund for Agricultural Development (IFAD)

Type of Organization:

Foreign or Multilateral Aid Agency

Intervention Timing

Intervention or Program Started at time of Registration?

Yes

Start Date:

04/01/2016

End Date:

Evaluation Method

Evaluation Method Overview

Primary (or First) Evaluation Method:

Matching

Other (not Listed) Method:

Additional Evaluation Method (If Any):

Randomized control trial

Other (not Listed) Method:

Method Details

Details of Evaluation Approach:

Model: Method for the Propensity Score
Assignment to treatment
Different classical methods can be used to describe the assignment to treatment, such as
tests of comparison of means (student test or ANOVA), tests of comparison of distribution
(chi-square), or a series of univariate and multivariate logistic regressions.
The objective of this preliminary step is to identify the variables that could potentially
be included in the construction of the propensity score.
In the framework of this study, we already distinguished between the two groups
concerning subscription or no subscription to the agricultural insurance facilitated by
PADAER. Insured producers made up the treated group, and the uninsured formed the
control group.
Formalization of the model
Access to the program (agricultural insurance) is represented by a random variable T
for each individual i:
Ti = 1 if the individual insured
Ti = 0 otherwise
The effectiveness of agricultural insurance intervention would be measured by two latent
outcome variables:
Y1i
if the individual insured T = 1
Y0i
otherwise T = 0
These two variables correspond to the potential outcomes of the program. They are
never simultaneously observed for the same individual. For an individual being treated,
Y1
i is observed while Y0
i is unknown. In this case, the variable Y0
i corresponds to the result
that would have been obtained if the individual had not been treated (counterfactual). For
an untreated individual, on the contrary, we observe Y0
i while Y1
i is unknown.
The observed outcome variable for each individual can therefore be deduced from the
potential variables and the treatment variable by the following relation:

 

Private Details of Evaluation Approach:

Outcomes (Endpoints):

investments in agricultural inputs

the annual household income,

agricultural income,

income from corn and rice, and

income from corn
and rice plus insurance benefits (payout)

Unit of Analysis:

Household

Hypotheses:

This study aims to assess the effects of risk management tools on the agricultural performance
of rural producers benefiting from the joint support of the Senegalese state and the International
Fund for Agricultural Development (IFAD) through the co-financed project PADAER

Unit of Intervention or Assignment:

Head of household

Number of Clusters in Sample:

2 regions

Number of Individuals in Sample:

1167 farmers

Size of Treatment, Control, or Comparison Subsamples:

1167 farmers, including 379 beneficiaries of the index-based insurance and 788 controls

Supplementary Files

Analysis Plan:

Other Documents:

Data

Outcomes Data

Description:

household survey Two (2) questionnaires were used during the data collection: (1) a household questionnaire and (2) a questionnaire administered to the PO leader (facilitator). All the questionnaires were administered with the participants’ consent. Questions were asked about the knowledge of index-based insurance and the payout modalities per season, the total area cultivated (ha), and total area insured (ha).

Data Already Collected?

Yes

Data Previously Used?

No

Data Access:

Not restricted - access with no requirements or minimal requirements (e.g. web registration)

Data Obtained by the Study Researchers?

Yes

Data Approval Process:

Approval Status:

Treatment Assignment Data

Participation or Assignment Information:

Yes

Description:

Data Obtained by the Study Researchers?

Data Previously Used?

Data Access:

Data Obtained by the Study Researchers?

Data Approval Process:

Approval Status:

Data Analysis

Data Analysis Status:

Yes

Study Materials

Upload Study Materials:

Article: agriculture-13-00989.pdf

Registration Category

Registration Category:

Non-Prospective, Category 4: Data for measuring impacts have been obtained/collected by the research team and analysis for this evaluation has started

Completion

Completion Overview

Intervention Completion Date:

Data Collection Completion Date:

Unit of Analysis:

Clusters in Final Sample:

Total Observations in Final Sample:

Size of Treatment, Control, or Comparison Subsamples:

Findings

Preliminary Report:

Preliminary Report URL:

Summary of Findings:

Paper:

Paper Summary:

Paper Citation:

Data Availability

Data Availability (Primary Data):

Date of Data Availability:

Data URL or Contact:

Access procedure:

Other Materials

Survey:

Survey Instrument Links or Contact:

Program Files:

Program Files Links or Contact:

External Link:

External Link Description:

Description of Changes:

Study Stopped

Date:

Reason: