Water and Poverty Linkages in Water and Poverty Linkages in Agricultural Settings: Agricultural Settings:

São Francisco River Basin, BrazilSão Francisco River Basin, Brazil

Summer L. AllenSummer L. Allen

World Water WeekWorld Water WeekStockholm, SwedenStockholm, Sweden

August 18, 2009August 18, 2009

Past Research ConclusionsPast Research Conclusions

A few empirical studies have addressed this link (Water A few empirical studies have addressed this link (Water Poverty Index- Sullivan 2005, Constrained Income Poverty Index- Sullivan 2005, Constrained Income models -Boccanfuso, Estache, and Savard 2005, models -Boccanfuso, Estache, and Savard 2005, World World Bank 2006, Neubert, et al. 2007).Bank 2006, Neubert, et al. 2007).

In Latin America in particular, water access one of the In Latin America in particular, water access one of the most important factors in income disparities (UNDP most important factors in income disparities (UNDP 2006). 2006).

In general, poverty is 20-40% lower inside irrigation In general, poverty is 20-40% lower inside irrigation networks, but depends on many other factors (land networks, but depends on many other factors (land equity, etc.) (World Bank 2007, Bhattarai, et al. 2002).equity, etc.) (World Bank 2007, Bhattarai, et al. 2002).

Research QuestionsResearch Questions

How should access to water be measured to incorporate How should access to water be measured to incorporate surface water flows and would this change conclusions surface water flows and would this change conclusions regarding impact?regarding impact?

What role has long-term water availability played in rural What role has long-term water availability played in rural poverty in the São Francisco River Basin (SFRB)?poverty in the São Francisco River Basin (SFRB)?

What other factors influence the ability of smallholders to What other factors influence the ability of smallholders to generate income or gain employment? generate income or gain employment?

Research LocationResearch Location

Total Poverty in SFRBTotal Poverty in SFRB

Rural PovertyRural Poverty

Water AvailabilityWater Availability

i

i

i

iti slope

CA

E

Pwai ln

Agricultural ProductionAgricultural Production

Precipitation and Rural Poverty Precipitation and Rural Poverty in the SFRBin the SFRB

02

0%

40

%6

0%

% r

ura

l po

or

500 1000 1500 2000

mean precipitation(mm)

Potential Effects of Water on Potential Effects of Water on PovertyPoverty

• Direct impacts of water access (Direct impacts of water access (YY))

• Increases in yields for a specific crop (Increases in yields for a specific crop (QQ) )

• Change in crop mix (Change in crop mix (VV)*)*

• Expansion of agriculture (Expansion of agriculture (AA))

• Change hourly labor (Change hourly labor (HH))

Income (Income (YY) in each município () in each município (ii) is a product of agricultural ) is a product of agricultural incomes (incomes (YYagag) and wages earned () and wages earned (WW), given socio-economic ), given socio-economic factors (factors (SESE) and environmental factors () and environmental factors (EE), and influenced by ), and influenced by water (water (WAWA):):

Variables EvaluatedVariables Evaluated

Water Access Variables (Water Access Variables (WAWA)) Precipitation Precipitation Variability of PrecipitationVariability of Precipitation Water Availability IndexWater Availability Index

Agricultural Variables (Agricultural Variables (YYagag)) Cultivated AreaCultivated Area % of Small Farms% of Small Farms % Irrigated% Irrigated Output Index:Output Index:

WagesWages

Socio – Economic Controls (Socio – Economic Controls (SESE) ) Primary Education Primary Education Migration RatesMigration Rates DependentsDependents Distance to MarketsDistance to Markets UrbanizationUrbanization State IndicatorState Indicator Size of MunicípioSize of Município

Low Precipitation AreasLow Precipitation Areas

Poverty Extreme Poverty

VARIABLES Water Agric Socio-Econ Political Water Agri Socio-Econ PoliticalPrecipitation 0.05 0.04 0.02 0.05 0.02 0.02 -0.02 0.04Std dev of precip 0.49*** 0.45*** 0.25* 0.25* 0.30** 0.24* 0.08 0.05Water avail index 1.00 5.86 2.77 2.45 0.10 2.76 1.13 1.23% irrigated -0.64*** -0.47** -0.47** -0.36** -0.27 -0.28*Log productivity index -25.95*** -14.35** -12.54** -17.32*** -9.80** -8.85**Log cultivated area -6.65** -0.28 -0.31 -5.84** -2.12 -1.89Distance to cities 0.07* 0.07* 0.09** 0.07*Distance to airports 0.10* 0.08 0.14*** 0.12**

% migrated -1.17 -1.60** -0.11 -0.92Log rural wages -7.38* -8.09* -6.11 -4.78Dependency ratio 0.37*** 0.36*** 0.20*** 0.21***Log Urbanization 1.65 6.17 1.72 9.59education 2.97 4.35 -0.85 0.28% small farms -0.23 -0.53 0.37 0.2AL state 0.08*** 0.09***SE state 0.04* 0.06***BA1 state 0.04** 0.08***PE1 state 0.04** 0.07***Município size 0.08 0.18Observations 238 237 195 195 237 236 194 194Adjusted R-squared 0.03 0.204 0.436 0.462 0.012 0.126 0.279 0.382

Low Precipitation AreasLow Precipitation Areas

High Precipitation AreasHigh Precipitation Areas

High Precipitation AreasHigh Precipitation AreasPoverty Extreme Poverty

VARIABLES Water Agri Socio-Econ Political Water Agri Socio-Econ Political

Precipitation -0.30*** -0.35*** -0.18*** -0.16*** -0.11*** -0.14*** -0.07*** -0.05***

Std dev of precip 1.01*** 0.99*** 0.32** 0.22 0.56*** 0.55*** 0.25*** 0.11

Water avail index -10.29 -6.74 -4.67 -6.89* -1.18 0.75 1.95 -0.5% irrigated 0.02 -0.21 -0.26 0.01 0.04 0.02Log productivity index -29.36** -10.07 -10.14 -13.29** -6.11 -5.88*Log cultivated area 20.27*** 7.02** 2.74 11.20*** 4.54*** 0.32

Distance to cities 0.08** 0.08* 0.05** 0.04*

Distance to airports 0.03 0.02 0.04 0.01

% migrated -0.1 -0.29 0.29 0.09

Log rural wages -18.58*** -18.60*** -4.50** -4.22**

Dependency ratio 0.42*** 0.38*** 0.13*** 0.09***

Log Urbanization -71.46*** -62.30*** -43.97*** -32.56***

education -25.20*** -21.84*** -16.50*** -11.66***% small farms 1.96*** 1.75*** 0.96*** 1.00***MG state -0.05* -0.03**BA1 state -0.01 0.01Município Size 0.09 0.15Observations 193 193 171 171 193 193 171 171Adjusted R-squared 0.416 0.485 0.788 0.797 0.397 0.497 0.735 0.812

Summary of Regression ResultsSummary of Regression Results Explain 80% of variation in rural poverty in high precip areas; Explain 80% of variation in rural poverty in high precip areas;

40-50% of poverty in low precip areas.40-50% of poverty in low precip areas.

Water variables (including the new WAI) explain 40% of Water variables (including the new WAI) explain 40% of variation in poverty in high precip areas but only10% in low variation in poverty in high precip areas but only10% in low precip areas. precip areas. Similar results seen between water and Similar results seen between water and HDI.HDI.

In low precip areas, inter-annual variation is important while In low precip areas, inter-annual variation is important while quantity is more important in high precip areas. quantity is more important in high precip areas.

In low precip areas, options off-farm and market access help In low precip areas, options off-farm and market access help reduce poverty rates; in high precip areas, human capital reduce poverty rates; in high precip areas, human capital investments help reduce poverty rates.investments help reduce poverty rates.

State-level influences are significant.State-level influences are significant.

Policy ImplicationsPolicy Implications Historical environmental constraints and adaptations must be Historical environmental constraints and adaptations must be

considered in economic strategies. considered in economic strategies.

Factors other than water availability or agricultural production Factors other than water availability or agricultural production are important for poverty alleviation in low precipitation are important for poverty alleviation in low precipitation areas. However, low precip areas may be particularly areas. However, low precip areas may be particularly vulnerable to increased variability due to climate change.vulnerable to increased variability due to climate change.

Investments in primary education and market infrastructure Investments in primary education and market infrastructure (in some cases, airport access) should be supported.(in some cases, airport access) should be supported.

Extreme poverty and poverty may need to be addressed Extreme poverty and poverty may need to be addressed through different mechanisms (in low precip areas, irrigation through different mechanisms (in low precip areas, irrigation is less important in determining ex. poverty than poverty).is less important in determining ex. poverty than poverty).

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