When skill training is the \\\'milk\\\'

Narayan C. Das, now pursuing Ph.D at the University of Berkeley and a committed young researcher, sent an article for our consumption. It's about a cow but not the ones we used to write in our school days as essays. It's an article that compared livestock transfer with and without training and thus highlighting the importance of skill training for augmentation of household income.
The above-mentioned research has been done by Jonathan Argent, Britta Augsburg and Imran Rasul on 'Livestock Asset Transfers With and Without Training: Evidence from Rwanda'. Rwanda is a state in central and east Africa bordered by Uganda, Tanzania, Burundi and Congo. As we all know, Rwanda's economy suffered heavily during the 1994 Rwandan Genocide, but has since been strengthened. The economy is based mostly on subsistence agriculture. Coffee and tea are major cash crops for export.
Rwanda's Girinka (`One Cow per Poor Family') programme has distributed more than 130,000 livestock asset transfers in the form of cows to the rural poor since 2006. Supply-side constraints resulted in complementary training for some beneficiaries but not for others - a situation of 'haves' and 'have-nots'. The researchers exploited these differences to estimate the additional impact of receiving complementary training with cow transfer, on household's economic outcomes up to six years after having received the livestock asset transfer. "As farmers themselves do not self-select to receive training, rather the provision of training is driven by supply/capacity constraints faced by NGOs, the assignment of training is plausibly exogenous to other factors that drive outcomes related to milk production, livestock productivity, household earnings and assets, as measured up to six years after the initial livestock asset transfer".
We now describe how the programme operated, focusing on the elements key to the research design. The primary role of NGOs lies in the distribution of cows. However, some Girinka providers include training as part of their programme when they give a beneficiary a cow, while others do not. Those providers that provide training typically train all beneficiaries to whom they give a cow. Interviews with NGOs in the sector revealed that some viewed training as an integral part of the package. For example, Send a Cow, one of the largest NGO partners in the programme, explained their Girinka operation as being a five- year process, beginning with training in preparation for receiving the cow (e.g. producing feed, building a shed) and ending with the households graduating out of poverty because they had acquired the skills to care and manage cows as a productive asset. To get a sense of the intensity of training provided, the researchers obtained information on training costs from one of the most important NGO partners for the delivery of the Girinka programme, Send a Cow. Their training related to animal husbandry, that takes place over seven days and to groups of farmers, was estimated to cost around RWF 7,800 per beneficiary. It is this cost figure that they compare any monetary returns generated by the training.
The main results are as follows. First, households that received training with their cow are 56 per cent more likely to be producing milk in 2012, and on average produce 1.5 l more milk per day. This corresponds to a 162 per cent increase in milk production over households that received no training. This increased production stems largely from increased milk yields obtained holding constant the stock of cows, rather than increased holdings of cows per se. Second, the increased production and sales of milk translate into significantly higher households earnings: households with training experience a six-fold increase in earnings from milk sales as compared to the average earnings of households that did not receive training.
Moreover, the other key income gain for trained households comes through sales of animals. These income gains dwarf the monetary cost of the training supplied per farmer, generating rates of return far in excess of those that are likely to be available through other investments. Finally, the increased earnings households with training experience, translate into greater asset accumulation: households that received training with their transferred cow since 2006, are significantly more likely to own cooking stoves, bicycles and mattresses by the date of the survey in 2012.
Overall, the results show that even in a setting where linkages between farmers and markets remain weak so that the returns to training might be somewhat attenuated (say because farmers cannot capture any value added from being able to sell to urban consumers), the provision of training with asset transfers still has permanent and economically significant impacts on household's ability to produce milk, livestock productivity, earnings, and asset accumulation. In short, farmer skills related to animal husbandry matter and prior to the program there are likely to have been binding constraints on the human capital farmers had on this dimension. Attempts to improve these types of human capital are likely to yield high mean returns, as well as reducing income volatility as households are more able to rely on stable income streams from the sales of livestock produce such as milk. These type of human capital investments, for those that have long exited the formal schooling system, are an important form of antipoverty measure.
The researchers suggest that future work should certainly be based 'on randomised control trials and should investigate the optimal design of training to bundle with asset transfers. This will become increasingly important as such programmes are rolled out to different populations that vary in their links to markets, pre-existing levels of knowledge of livestock rearing, and availability of alternative sources of training such as government and private sector vets'.

--Abdul Bayes is Professor of Economics at Jahangirnagar University.
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