308
with risk (Ksoll et al. 2016). Moreover, rural households are more likely to make
in-depth CSA investments if they either receive remittances or are engaged in offfarm employment, since these give access to more stable revenue streams (JetteNantel 2013).
2
26.3.3 Risk Mitigation Pathway
Investment in CSA is closely related to perceptions of risk. Dercon and Christiaensen
(2011) show with panel data from Ethiopia that households have different tolerances for taking on risky production technologies based on their fears of poor harvests. In this situation, CSA adoption is discouraged not just by lack of credit but
also by a lack of insurance or other risk-mitigating measures. Either indemnitybased or index-based insurance might help (Ndagijimana et al. 2017; Brick and
Visser 2015).
CSA practices may also require that farmers have access to specific inputs, such
as tree seedlings, seeds or fertilizers. Many farmers lack access to fertilizer, which
is a key determinant of productivity and efficient resource use. Duflo et al. (2011)
have shown with experiments in Kenya that innovative means of input delivery—
including those that rely on mobile phones—can improve the certainty of input
available and thus enhance CSA use.
Intra-household decision-making can also play an important role in risk mitigation and resource allocation. Women tend to be somewhat more risk-averse but are
also more likely to invest in activities with a longer gestation period (Wong 2016).
Consequently, gender-transformative rural finance strategies are likely to be better
able to overcome trade-offs between short-term (consumption) and longer-term
(resource conservation investment) goals (World Bank et al. 2015).
26.4 Complementarities
Our discussion of these different pathways may give the impression that we are
dealing with fully separate activities. That, of course, is not the reality of rural
finance, where financial products and services tend to be linked to several farm
household activities. The connected nature of financial services and activities can
offer advantages. Since rural households simultaneously target a number of different objectives (like nutrition, resilience and resource-use sustainability), it is important to build synergies between instruments that contribute to climate-change
mitigation, adaptation and food security.
2 There is also some contrary evidence in the sense that remittances are not used to invest but rather
to increase consumption or reduce labour supply (Lartey 2013).
R. Ruben et al.
with risk (Ksoll et al. 2016). Moreover, rural households are more likely to make
in-depth CSA investments if they either receive remittances or are engaged in offfarm employment, since these give access to more stable revenue streams (JetteNantel 2013).
2
26.3.3 Risk Mitigation Pathway
Investment in CSA is closely related to perceptions of risk. Dercon and Christiaensen
(2011) show with panel data from Ethiopia that households have different tolerances for taking on risky production technologies based on their fears of poor harvests. In this situation, CSA adoption is discouraged not just by lack of credit but
also by a lack of insurance or other risk-mitigating measures. Either indemnitybased or index-based insurance might help (Ndagijimana et al. 2017; Brick and
Visser 2015).
CSA practices may also require that farmers have access to specific inputs, such
as tree seedlings, seeds or fertilizers. Many farmers lack access to fertilizer, which
is a key determinant of productivity and efficient resource use. Duflo et al. (2011)
have shown with experiments in Kenya that innovative means of input delivery—
including those that rely on mobile phones—can improve the certainty of input
available and thus enhance CSA use.
Intra-household decision-making can also play an important role in risk mitigation and resource allocation. Women tend to be somewhat more risk-averse but are
also more likely to invest in activities with a longer gestation period (Wong 2016).
Consequently, gender-transformative rural finance strategies are likely to be better
able to overcome trade-offs between short-term (consumption) and longer-term
(resource conservation investment) goals (World Bank et al. 2015).
26.4 Complementarities
Our discussion of these different pathways may give the impression that we are
dealing with fully separate activities. That, of course, is not the reality of rural
finance, where financial products and services tend to be linked to several farm
household activities. The connected nature of financial services and activities can
offer advantages. Since rural households simultaneously target a number of different objectives (like nutrition, resilience and resource-use sustainability), it is important to build synergies between instruments that contribute to climate-change
mitigation, adaptation and food security.
2 There is also some contrary evidence in the sense that remittances are not used to invest but rather
to increase consumption or reduce labour supply (Lartey 2013).
R. Ruben et al.