South Asia Agriculture and Rural Growth Impact Note Series OCTOBER 2019 Combating Malnutrition Can group procurement be equitable? Results from a food security program in rural Bihar 4 This note is based on the paper The Distributional Consequences of Group Procurement: Evidence from a Randomized Trial of a Food Security Program in HIGHLIGHTS Rural India, authored by P. Christian.1 • India has among the highest rates of child malnutrition worldwide, with Bihar one CONTEXT of the worst affected states. • With the intent of combating food Bihar is the third most populous state in India with 8.1% of the insecurity, the Government of India country’s population or 104 million people, 89 % of whom live and (GoI) and the state Government of Bihar work in rural areas. Rural Bihar is characterized by suboptimal service (GoB) offer a Food Security Fund (FSF) delivery, a complex political and social fabric, limited inclusion in via the Bihar Rural Livelihoods Promotion institutions, limited economic opportunities, poor development Society. infrastructure and limited availability of financial services for the poor. Bihar lags behind the national average in all indices of nutritional • The program has proved successful in status – 50% children aged five and under are stunted, 21% have muscle giving rural women agency to ensure atrophy and more than 44% are underweight. food security for themselves and their families. The Public Distribution System (PDS), India’s primary food security • The scheme is most effective in reaching program is plagued by inefficiencies, leakages and wastage related to the poorest households when local systemic factors of procurement, transportation, storage and targeting. committees procure the most affordable Notably, the costs of the system are higher in administratively weaker grains. states that account for a large share of the poor. Landless subsistence workers2 are most at risk since they depend on local and insufficient remittances to purchase food markets to purchase seasonally available goods. As a consequence of male which is typically neither nutritionally diverse out-migration, women headed households are dependent on infrequent nor enough in quantity to meet their nutritional _______________ requirements. 1. The original paper is available at http://documents.worldbank.org/curated/ en/438651467041713497/pdf/106448-WP-PUBLIC.pdf In order to avoid these inefficiencies, programs 2. Comprising 70% households in Bihar. have begun decentralizing procurement Impact Note 4: OCTOBER 2019 BOX 2: BRLPS Targets and Achievements Poor Self-Help Village Cluster-level Households Groups Organizations Federation 18,36,505 1,54,626 10,445 225 15,00,000 1,50,000 10,000 102 5,90,000 55,000 770 42 Community Households members 62,460 1,46,291 60,000 25,000 Target Revised Target Project Completion INTERVENTION The Bihar Rural Livelihoods Promotion Society (BRLPS, colloquially known as JEEViKA) was established by the GoB to help develop scalable and sustainable models for livelihoods enhancement of rural poor households. The objective was to reduce the Below Poverty Line (BPL) population to 22% by 2015 or about 1.5% per year, in order to achieve the Millennium Development Goals (MDG) target and the GoI’s Eleventh Five Year Plan strategy which emphasized investment in women’s socio-economic to allow communities to choose the goods themselves empowerment, enhancing livelihood opportunities, and and procure them locally. An important concern in Bihar participation of local level institutions to make service is whether decentralized procurement will improve or delivery more accountable.3 worsen targeting outcomes. If communities choose to buy JEEViKA piloted in 6 blocks in 6 districts of Bihar – Gaya, the lowest cost, but also lowest quality foods available, the Khagria, Madhubani, Muazzafarpur, Nalanda and Purnea. intervention could be self-targeting since poor households With the NRLM program it expanded to all 534 blocks in will find it worthwhile to participate. If communities choose 38 districts by 2011. to buy higher cost foods that may be higher quality, the program will not maximize the degree to which benefits The BRLPS’s primary role is to organize women into Self- accrue to the poor. Help Groups (SHGs) that conduct microfinance activities and participate in other BRLPS programs. SHGs are further BOX 1: Objectives (MDGs) grouped into Village Organizations (VOs) consisting of 100-150 women, all of whom live within the same village. The stated objectives of this intervention directly The project design targets poor rural women by considering supported the following Millennium Development their existing social vulnerability and spatial distribution. Goals: From 2008-2011 the project mobilized more than 1.8 million poor rural women from rural households into 1,54,626 Self- (i) Goal 1, Target 1: improving incomes of the Help Groups (SHGs) and 10,445 village organizations. poorest - reducing the proportion of the people living on less than $ 1 a day. While the BRLPS was not specifically mandated to reduce malnutrition, since most households incurred debts due to (ii) Goal 3, Target 4: promoting gender equality and health and nutritional expenses, their SHG and VO network empowering women. became an ideal vehicle for policy makers to deliver targeted (iii) Goal 8, Target 45: development and public goods in order to combat the issue. implementation of strategies for decent and The Food Security Fund (FSF) is a direct livelihoods productive work for youth. intervention designed to target the most credit-constrained _______________ 3. These objectives were also attuned to the World Bank’s Country Strategy (CAS-August 2004) for India, which highlighted support for lagging states including Bihar through sustained growth, poverty alleviation and improved access to quality social services. Impact Note 4: OCTOBER 2019 BOX 3: Food Security Fund Grain VO solicits 3 Months distributed `1,00,000 bids from VO to the VO FSF nearby grain members on to pay vendors the basis of individual individual shares demand members of the VOs, without exposing them to high interest baseline, 1,518 households were re-surveyed in at least one of rates. In response to the issues of leakage and wastage in the two follow-up rounds with balanced attrition (p=0.76). existing programs, and to improve community participation in the process, the program incentivizes group procurement Importantly, in all the clusters being evaluated, rice in local markets. Although the rice is not directly subsidized, was the food item on which the FSF subsidy was targeted4. the program encourages bulk purchasing - thereby reducing The empirical data thus collected was correlated with a pre- the cost of rice at the vendor level. Pooling the demands existing model to evaluate the impact of the program. of the entire VO together also improves bargaining power, and calls for more competitive bids. Most importantly, KEY FINDINGS purchases through the food security funds avoids interest costs for (the poorest) households that would otherwise Since rice is a non-homogenous grain with several different rely on credit to buy rice. qualities available in the same shop5 it is problematic to Figure 1: Correlation between household wealth and FSF participation 60 % of Households Participating 50 40 30 7.5 8 8.5 9 9.5 10 Lowest cost rice Highest cost rice Calculations from jeevika FSF IE ending survey. Household wealth is the natural log of household expenditure inthe last month in Rupees. Lowest and highest cost are the bottom and top quartile of price of purchased rice EVALUATION DESIGN target the subsidy at the desired beneficiaries. The poorest households that are typically most at risk from food insecurity A cluster-randomized control trial was conducted in six benefit the most when the VOs choose the lowest quality administrative blocks, which had a significant numbers of VOs of rice for procurement. Empirical results show significant and had not yet availed of the FSF. The blocks were divided increases in consumption for the wealthiest in the average into three clusters each, the program was implemented in 18 community. Impacts for the poorest households are sensitive clusters comprising 90 VOs, with 45 VOs each designated as to which variety of rice is procured by the community treatment and control. Baseline data was collected from five Increase in consumption for the poor can be seen when VOs in each of the 18 evaluation clusters in July 2012 prior enough villages choose to opt for the lowest quality grain. to initiation of the lending program. The lending program began in September 2012 and a post-intervention survey Moderately poor households, who may typically consume was completed in February-March 2013 covering detailed better quality rice, adjusted their preferences to select into food expenditure, weekly consumption, experiences of food the program when the lowest quality of rice is procured. insecurity, agricultural production, income and child health However, higher income households chose to opt out of the indices. Out of the original 1,529 households surveyed at program in this scenario. _______________ 4. In Bihar rice is one of the three staple food, others being wheat or maize, which together account for 33% of the food expenditure of the households surveyed. Including home produced goods, rice alone accounts for 25% of all expenditures of food in the state. 5. The quality and price of rice are positively correlated, with better quality rice costing more. Impact Note 4: OCTOBER 2019 When better or the best quality of rice is chosen, take for that rice, and not necessarily the needs of the poorest up is concentrated amongst the wealthier households. households in the cluster. The poorest households may still take up the program to increase the quality of rice they consume, but it leads to   O committees reveals that wealthier members An analysis of V a reduction in their consumption, because they shift to are disproportionately represented therein and are more purchasing higher cost food than they did in absence of the likely to participate in the program than non-committee program. This reduction of food grain consumption among members. To reinforce the potential for program participation the poor and moderately poor was an unintended effect of to be well targeted, the program design should be adjusted the program. to ensure that the choices of the poorest households are given more influence in procurement decisions. POLICY LESSONS CONCLUSIONS Understanding the processes by which some of the VOs successfully selected the lowest quality and price of rice Besides the well-documented challenges of elite capture, could reveal mechanisms that make the group procurement limited information about markets and preferences continue approach of the program better targeted towards the to plague even the most well-intentioned development poorest households. Decentralizing the choice of good(s) efforts. Improving both efficiency and equity in programs to subsidize may seem like a good way to incorporate local involving group procurement will require policies that preferences, but in the absence of adequate controls, the combine in-kind transfers with mechanisms that address process may exacerbate local inequalities. The quality of rice beneficiary preferences, including for the poorest sections selected reflects the VO committee members’ desirability of society. ABOUT THE Impact Note SERIES This note is part of the South Asia Agriculture and Rural Growth Impact Note Series, that seeks to disseminate research and analysis focused on World Bank financed rural, agriculture and food systems programs in India. Series editors: Abhishek Gupta and Gayatri Acharya. Photographer: Ritayan Mukherjee. We are grateful for funding from/the support of The South Asia Food and Nutrition Security Initiative (SAFANSI), Gates Foundation, Ministry of Rural Development and various state rural development departments. This note was prepared by Deepti Kakkar (Consultant, World Bank) and published by the Food & Agriculture Global Practice at The World Bank, 1818 H Street, NW Washington, DC 20433 USA. Website: www.worldbank.org. For further information or copies please email: galex2@worldbank.org. Disclaimer: The findings, interpretations, and conclusions expressed in this note are entirely those of the author(s) and should not be attributed in any manner to the World Bank, to its affiliated organizations or to members of its Board of Executive Directors or the countries they represent. REFERENCES K. Das. Research Gaps and Policy Priorites: Evidence from Bihar. What is available R. Radhakrishna and K. Subbarao, India’s Public Distribution System, A National and what is required? International Growth Centre, 2018 and International Perspective. World Bank Discussion Paper No. 380, 1997 Note 1. Jim Hancock, Mrinalini Penumaka and Mio Takada. Main Findings of U. Datta. Socio-Economic Impacts of JEEViKA: A Large-Scale Self-Help Group Implementation Completion Review Report—Lessons from a Decade of Project in Bihar, India. World Development,Volume 68, pp. 1-18, 2015 Implementation of BRLP, and Note 8. Anna-Lisa Noack, Padma Buggineni, U. Datta, Retrospective Impact Evaluation of BRLP (2007-2010), Socio-Economic Apolenarius Purty, and Somya Shalini. Improving Nutrition through Livelihoods Impacts of JEEViKA, a project by the Bihar Rural Livelihood Promotion Society: in M. Takada and M. R. Choudhury. Ed. A Decade of Rural Transformation, Lessons A Retrospective Study,The Social Observatory – Development Research Group, Learnt from the Bihar Rural Livelihoods Project – JEEViKA, JEEViKA Learning World Bank, 2016   orld Bank Publications, 2017 Note Series, No.1, W V. 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The Distributional Consequences of Group Procurement: Evidence World Bank Document - International Development Association Project from a Randomized Trial of a Food Security Program in Rural India, The Social Appraisal Document on a Proposed Credit in the Amount of US$ 290 million Observatory – Development Research Group, World Bank, July 1, 2015 to the Republic of India for a Bihar Transformative Development Project P. Sanyal, V   . Rao, and S. Majumdar. Recasting culture to undo gender: “JEEViKA II” June 1, 2016, Report No. PAD1892 A sociological analysis of Jeevika in Rural Bihar, India. World Bank Policy World Bank Document – Implementation Completion Report Review. Research Working Paper, (7411), 2015 India - Bihar Rural Livelihoods Project (English), July 5, 2017, Report No. ICRR0020734