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Inventory credit to enhance food security in Burkina Faso

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  • Le Cotty, Tristan
  • Maître d’Hôtel, Elodie
  • Subervie, Julie

Abstract

In many African countries, rural households typically sell their crops immediately after the harvest, and then face severe food shortages during the lean season. This paper explores whether alleviating both credit and storage constraints through an inventory credit (or warrantage) program is associated with improvements in household livelihood. We partnered with a rural bank and a nation-wide organization of farmers to evaluate a warrantage program in seventeen villages in Burkina Faso. In randomly chosen treatment villages, households were offered a loan in exchange for storing a portion of their harvest as a physical collateral in one of the newly-built warehouses of the program. We found that the program has, on average, increased cultivated area in treated villages (mainly cotton and maize), fertilizer use, cattle and grain stock at the end of lean season (millet). Although much less robust, the results of the estimations concerning the direct users of the system further suggest that warrantage may have extended the self-subsistence period of about two weeks and increased dietary diversity, with more fruit consumed weekly.

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  • Le Cotty, Tristan & Maître d’Hôtel, Elodie & Subervie, Julie, 2023. "Inventory credit to enhance food security in Burkina Faso," World Development, Elsevier, vol. 161(C).
    • Handle: RePEc:eee:wdevel:v:161:y:2023:i:c:s0305750x22002820
    DOI: 10.1016/j.worlddev.2022.106092
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    More about this item

    Keywords

    Inventory credit; Warrantage; Intertemporal price fluctuations; Storage; Savings;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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