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Chapter 3 The importance of addressing risk 107
who participated in NREGA in Maharashtra State planted higher-yielding rather than
drought-tolerant crop varieties, unlike farmers in neighbouring states. 141 Participation
in Ethiopia’s PSNP has meant that significant numbers of beneficiaries are now able
to avoid selling food to pay for short-term needs, and many now feel sufficiently secure
in their income to take productive loans which they previously found too risky. 142
The Agricultural Inputs Subsidy Programme in Malawi is credited – along with good
rains – for the record harvests achieved in 2006 and 2007.
The benefits of such schemes can be wider however. The NREGA has benefited
many women, for example (see box 6). It has also resulted in decreased rates of
out-migration in areas where projects have been implemented, and higher rates
for agricultural wages because of tightening labour markets in some areas. 143
The conditional cash transfer schemes have increased both primary and secondary
enrolment rates by 4 to 8 per cent (the schemes have also increased the enrolment
rates of non-participants), raised attendance rates and reduced drop-outs; reduced
the incidence of child illness; and led to improvements in child height. 144 The pilot
Kalomo cash transfer scheme in Zambia was found to reduce hunger, improve diets,
reduce sickness, increase asset ownership (particularly goats) and promote investment.
Social protection is most powerful as a force for poverty reduction when linked to
other measures. For instance, a simulation of the effects of cash transfers on
Cambodian rural society showed that, combined together, social protection and
agricultural growth measures produced better results for poverty reduction as well as
growth, and that the highest economic returns were generated by combining health
and education subsidies with support to agricultural growth. 145 These findings
confirm a thesis of this report: that state initiatives are needed on a variety of fronts
to reduce risks in order to protect livelihoods and in order to enable poor rural people
to create and seize opportunities for growth and poverty reduction. The implications
in relation to agriculture, markets and stimulating opportunities in the non-farm
rural economy will be addressed in subsequent chapters. The precise combination
of protective and promotive policies must, however, vary from context to context.
For instance, conditional cash transfers, which have been successful in Latin America, 146
may not work in Africa, where health and education services are not sufficiently
accessible to the rural poor. Market-based solutions in turn depend on functioning
markets. Policymakers need to assess the appropriate mix of interventions and
evaluate and change programmes as circumstances change, without undermining
people’s confidence by changing policy unpredictably. Finally, one of the lessons
emerging out of a number of studies is that a social protection agenda has to be driven
internally, rather than by donors, and it has to be built on already-existing policies,
institutions and political structures. 147