The Impact of Seasonal Food and Cash Loans on Small-scale Farmers in Zambia: Policy Brief No. 3

Abstract

Small-scale farming remains the primary source of income for a majority of the population in developing countries. In rainfed agricultural settings, income typically arrives only once a year. To meet consumption and investment needs over the subsequent months in the absence of formal financial markets, households adopt a range of coping strategies. Two common strategies are reducing food consumption and selling labor to other farms, both of which improve short term liquidity, but may harm subsequent harvest outcomes. To investigate whether seasonal coping strategies lower farm output, we conducted a randomized controlled trial. This research is part of the Gender, Growth and Labour Markets in Low-Income Countries programme