Combining social protection with economic opportunities in rural Peru: the case of the joint intervention of JUNTOS & Haku Wiñay

Javier Escobal Carmen Ponce

The Intervention

○ Rather than a single Project this is a joint intervention. It combines:

A cash transfer: Through JUNTOS (the Peruvian CCT program)

200 soles every two months (about USD 75)

Haku Wiñay (which is a productive project targeted to the extreme poor in

rural communities. Managed by FONCODES.) Haku Wiñay can be

translated to “We are going to grow “/ “growing together”

3500 soles per beneficiary (USD 1300) in a 36 month period (not every body

gets this amount)

Project started in a pilot of 2 districts (about 930 beneficiaries) was expanded to

4 additional districts and then to 70 districts. In the 2013-2016 target population

is about 157,000 rural households in 2,100 rural towns.

○ Both FONCODES and JUNTOS are programs operated under the

umbrella of the Ministry of Development and Social Inclusion.

○ Target population: extreme poor living in rural areas (ultra poor)

Haku Wiñay Components

○ Haku Wiñay has four components, aimed at:

1. Improve farming production systems by providing technical

assistance to implement simple, low cost technology innovations.

FONCODES has identified 10 basic technologies that can be

implemented and adapted to the local economic and cultural context

(e.g. irrigation, organic fertilization; guinea pig production, etc.);

2. Develop and maintain healthy housing, such as safe kitchens, water

and solid waste management;

3. Promote inclusive rural businesses by helping farmers organize into

business associations, prepare business plans and pursue grants by

participating in competitions; and

4. Build financial capabilities by helping to develop savings plans,

particularly in households receiving assistance from the conditional

cash transfer program, Juntos.

1. Improved farming production systems: Sprinkler irrigation system

1. Improved farming production systems: Outdoor in-field horticulture

1. Improved farming production systems: Plot with cultivated mixed pastures

1. Improved farming production systems: Agroforestry

1. Improved farming production systems: Plot with cultivated mixed pastures

1. Improved farming production systems: Production of organic fertilizers

1. Improved farming production systems: Guinea pig breeding (& Chicken breeding)

2. Healthy housing: Improved cooking stoves

2. Healthy housing: Secure drinkable water

3. Promotion of inclusive rural businesses

o General Description of the intervention : This is a competitive Grants for the promotion of rural business profiles, using CLAR methodology

CLAR are “local fund allocation committees” that provide a public and transparent way of allocating funds

The competition uses non-standard techniques to evaluate business plans (acting,

4. Building financial capabilities

o Financial literacy and savings promotion

Main Outcome Indicators

Haku Wiñay

+

JUNTOS

STRENGTHENING

OF THE FAMILY

PRODUCTION

SYSTEM

FACILITATE

SELF INCOME

GENERATION

- Increase and diversify

production.

- Increase and diversify

consumption

- Decreased per-capita consumption

of firewood.

- Decreased respiratory and

diarrheal illness

- Increase monetary and non-

monetary income

- Increase household expenditure

- Improved management of savings.

- Access to other financial products.

The Evaluation setup

o An agreement between FONCODES, the evaluation office of MIDIS and GRADE was reached. Financed by Ford Foundation

o Base line data: Quantitative

A total of 36 community surveys and 459 rural households were interviewed in a total of 8 districts involved (231 households corresponds to the treatment group and 228 to the control group (which will also be intervened at the end of the budget cycle, i.e. in 2016).

After listing all communities that were part of the intervention, communities were grouped in pairs that show similarities in productive, social and economic conditions. the communities were randomly assigned to treatment and control groups.

The Evaluation setup

o Base line data: Qualitative component We randomly sampled 3 pairs of communities, one in each

sub-region (Huancavelica, Cajamarca and Huanuco): one is a current intervention area and the other is part of the control group. In each community focus groups with men and women, and in-depth interviews were conducted with key stakeholders.

Haku Wiñay may affect differently men and women, the study will be exploring empowerment dynamics within households.

We are also exploration changes in food security perceptions

The Evaluation setup

o We recognize that the intensity of the treatment is not random. Some families may not be interested in some specific part of the treatment They may already have an improved stove and do not want the

one Haku Wiñay is offering them

All people are offered financial education but some may show up more frequently than others to training events

One of every ten participants may win a competitive grant

o Through the monitoring system we have constructed a treatment intensity scale

o The baseline survey was conducted on March 2013. The project started (with some delay) in August 2013. Second visit should be done in August 2015.

o In the meantime…..

Some initial impacts: The Vinchos-Chuschi Pilot

o The Baseline survey and simple was not designed by us. It was done by the implementing agency (FONCODES)

After selecting towns in two districts of Ayacucho (no random selection) all members of these towns were offered to be part of the Program. A list of 884 beneficiaries was generated (642 of which were JUNTOS beneficiaries; 73%).

A random sample of 321 (50%) was selected as a baseline.

In addition, a sample of 286 controls were selected (in an ad-hoc manner from neighbors): some of these are close relatives…some spillover effects may exist.

The implementing agency conducted a limited survey to assess income, assets and technological practices at baseline

Some initial impacts: The Vinchos - Chuschi Pilot

o We have revisited the sample of beneficiaries plus a group of “best” controls (identified) using propensity score matching

o Sample for revisit:

o We have not found so far any systematic attrition bias

Treated Control

Sample 321 (100%) 286

Outside common support

4 30

Final Sample 317 256

Attrited 19 33-25 replacements=14

Sample available 298 178

Some initial impacts - The Vinchos - Chuschi Pilot: Income by sources

Outcome Variable Control Treated Diff(BL) Control Treated Diff(SY) DIFF-IN-DIFF

Total Family Income 11,068.4 10,429.9 -638.5 11,537.4 12,305.6 768.2 1,406.7

Std. Error 408.4 408.4 577.6 408.4 408.4 577.6 816.9

t 27.1 25.5 -1.1 28.3 30.1 1.3 1.7

P>t 0.000 0.000 0.269 0.000 0.000 0.184 0.085*

Baseline Second Year

Some initial impacts - The Vinchos - Chuschi Pilot

o The increase in chickens and guinea pigs is larger than the asset transfer.. but it represent a small part of the total livestock.. We need to look at the numbers (breeding, mortality, reposition, consumption) to simulate medium term dynamics and discuss sustainability

o Milk: 33 liters per week more than the base line and 18 liters more per week than the change measured in the control group... (marginally statistically significant)

Some initial impacts: The Vinchos - Chuschi Pilot

o Income (monetary and non-monetary has increased), however monetary household expenditure has not change much

o There is a reduction in food expenditures (signif. diff-in-diff) and part of this savings have allowed to purchase other non-food items.

o Some improvements in the quality of the food intake: increase in consumption of animal protein and increase consumption of fruits, legumes and other vegetables (signif. diff-in-diff)

Perception & Expectations

o Assessment of improvement in household income show a significant improvement of treated over control group. (diff-in-diff: 14 percentage points; 65% vs 51%)

o Assessment of improvement in a sense that they have ability to change their destiny (using a 10 step ladder) show a significant improvement over the control group. (diff-in-diff: 0.6; 2.1 steps increase vs. 1.5)

o There is an improvement in their perception about their ability to cope with vulnerability (but here difference is not stat. significant w.r.t control group improvement)

o Ability to negotiate, Ability to identify better markets. Significant improvements… but cannot be attributed to intervention.

Some initial impacts: The Vinchos - Chuschi Pilot

o 78.7% of treated subjects say that health and nutrition has improved since baseline. This is 11 percentage point higher than matched controls and is stat. signific.

o Significant reduction in the occurrence of respiratory problems for children under 5 (w.r.t the control group). No differences in other age groups (5-11, 12-64 & 65+). (there is a significant reduction of firewood consumption, compared to the control group)

o No differences in frequency of episodes of diarrhea (all age groups) (marginally better for 5-11 age group)

Some initial impacts: The Vinchos - Chuschi Pilot: Financial education

o Sizable knowledge improvements on financial issues.

o There is an increase in the level of confidence in the financial system. (2 to 3.5 in a 10 step ladder) This change is significantly larger than the improvement registered in the control group (2.1 to 2.8)

Some initial impacts: The Vinchos - Chuschi Pilot: final remarks

o Although we need to do much more analysis, there is an improvement in overall income (mostly agriculture income) that can be attributed to the intervention

o There are also improvements in perceptions, empowerment, financial literacy

o We need to explore in more detail other areas (health, nutrition) but some positive results are evident.

o There is no evidence in the whole sample of changes in income diversification patterns, or improvements in ability to link to markets that can be attributed to the Haku Wiñay project… but here we need to explore if there exists impact heterogeneity.

o We also need to deal for the externalities that appear in the control group.

Thanks!