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Are Matching Funds for Smallholder Irrigation Money Well Spent?

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  • Mullally, Conner
  • Chakravarty, Shourish

Abstract

Groundwater irrigation can dramatically affect agricultural production and productivity. Despite its potential as an agricultural development tool, little credible evidence exists for the impacts of groundwater development on smallholder agriculture. We add to the evidence on the benefits of irrigation investments for small producers by evaluating the Rural Business Development (RBD) program of the Millennium Challenge Corporation in Nicaragua for small plantain producers. The RBD program offered matching funds covering up to 30% of the cost of two years of inputs, extension services, and diesel-powered micro-sprinkler irrigation for individual farms. In order to estimate the average impact of the RBD program on its beneficiaries, we combine model selection via the LASSO with doubly robust treatment effect estimation as applied to two years of panel data for 146 producers. We find that the program had substantial impacts on plantain revenue and production, while achieving nearly complete irrigation coverage of plantain land among beneficiaries. We find no discernible impact on household expenditure.

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  • Mullally, Conner & Chakravarty, Shourish, 2018. "Are Matching Funds for Smallholder Irrigation Money Well Spent?," SocArXiv x5vmz, Center for Open Science.
    • Handle: RePEc:osf:socarx:x5vmz
    DOI: 10.31219/osf.io/x5vmz
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    Cited by:

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    4. Hossain, Marup & Mabiso, Athur & Garbero, Alessandra, 2022. "Matching grants and economic activities among horticultural entrepreneurs: Long-term evidence from Rwanda," World Development, Elsevier, vol. 150(C).
    5. Marup Hossain & Tisorn Songsermsawas & Robinson H. Toguem, 2024. "The role of access to finance in disaster recovery: Evidence from coastal communities in India," Journal of Agricultural Economics, Wiley Blackwell, vol. 75(1), pages 218-234, February.
    6. Christian Stetter & Philipp Mennig & Johannes Sauer, 2022. "Using Machine Learning to Identify Heterogeneous Impacts of Agri-Environment Schemes in the EU: A Case Study," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 49(4), pages 723-759.
    7. Zewdie, Markose Chekol & Van Passel, Steven & Moretti, Michele & Annys, Sofie & Tenessa, Daregot Berihun & Ayele, Zemen Ayalew & Tsegaye, Enyew Adgo & Cools, Jan & Minale, Amare Sewnet & Nyssen, Jan, 2020. "Pathways how irrigation water affects crop revenue of smallholder farmers in northwest Ethiopia: A mixed approach," Agricultural Water Management, Elsevier, vol. 233(C).

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    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O22 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Project Analysis
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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