With a small number of 500 participants, REST tested the approach in Ethiopia as an effort to find pathways – not just out of extreme poverty – but out of what the state considers indefinite dependency on the Productive Safety Net Programme (PSNP), one of the largest national safety nets in the world. The CGAP – Ford Foundation Graduation pilot aims at ‘sustainable’ graduation, aptly described in the paper as ‘a state in which livelihoods have been fundamentally transformed through social protection interventions’. In theory, enabling the poorest households to develop sustainable livelihoods by way of an asset grant (instead of traditional microcredit) is fundamental to achieving graduation. For Ethiopia, REST conceptualises the long term outcome of the intervention as households achieving economic self-sufficiency and eventually moving out of the safety net. To this end, livelihoods options are designed to create a productive asset base that increases income, spreads risk and regularises cash inflows into the household.
Over the course of the intervention, challenges that arise in the short run are often related to individual capacity or particular household events – such as health shocks. External factors – such as market conditions and value chain linkages – are therefore more likely to affect participant households in the medium to long run, when they have finally crossed a certain threshold of asset holdings and frequently interact with the market.
Last year the pilot completed its course of 24 months. On a recent trip to Ethiopia, interviews with participants highlighted the market – related opportunities and challenges that come with trying to maintain and expand their livelihoods. I observed a marked difference between those engaged in farm – based activities, say a livestock fattening business, and those engaged in non – farm activities, like bee keeping. Bee keeping is obviously a high risk, high return investment – and has been prioritised in the region for growing domestic and international markets. The story of Asqual, a young single mother (previously a daily wage labourer) who is now a highly successful bee keeper is frequently cited as an ideal example to showcase the pilot’s potential. During the programme she was supported by the government extension workers, and subsequently was acquired land for a bee keeping farm and joined a honey cooperative to gain access to the international market. Finally, REST continually encouraged participants to develop their livelihoods and manage finances through Dedebit Credit and Savings Institution (DECSI), their microfinance arm and partner in the pilot. REST designed a mandatory savings component stipulating that over the course of two years, participants should save the initial working capital in individual accounts at DESCI. At 18 months into the programme, REST also began to facilitate DECSI’s loan approvals for participants like Asqual that are rapidly expanding their asset base, and adhering to the mandatory savings schedule. In her case, the organised nature of backward and forward value chain linkages ‘fundamentally transformed’ her livelihood.
For livestock fattening participants, times have been more difficult. While their access is restricted to local livestock product markets around Wukro and Mekelle, the falling value of their currency (Ethiopian Birr) has meant higher purchase and sale prices with overall marginal profits. Participants also observed that there are more sellers than buyers of fattened animals – leading to falling profits. Instead they have reduced their number of livestock, and rely on rearing for a relatively regular inflow of cash. Despite being trained and encouraged to use modernised fattening methods, participants prefer to use traditional feed such as grass and hay to fatten their animals, availability of which depends on favourable weather conditions. Inputs such as urea and other chemicals meant to accelerate the process are a luxury due to costs, and a hassle due to limited availability. In the end, food aid still remains a key source of income, and livestock sales just a little more than a coping mechanism.
As the graduation model finally goes to scale, opportunities, challenges and consequences of injecting certain livelihood assets into poor communities call for greater scrutiny and thought. Without adequate infrastructures in place to enable access to markets and financial services, ‘sustainable livelihoods’ is likely to become more of a development catch – phrase than an achievable ‘graduation’ objective.
Anasuya Sengupta is a Senior Researcher for the CGAP – Ford Foundation Graduation Program. Since 2010, she has been conducting a qualitative longitudinal study with participants of the CGAP – Ford Foundation Graduation pilot in Ethiopia. This blog is a response to Future Agricultural Consortium’s recent paper on the implications of market conditions and value chains on graduation from social protection programmes in Ethiopia.