CHAPTER 6 Conclusions and Policy Implications
n its first year of operation, Fadama II realized significant positive impacts on productive asset acquisition and household income. Using PSM and double-difference methods to control for project placement and self- selection biases, we found that Fadama II dramatically increased the value of group-owned productive assets of the poorest beneficiaries, both in terms of absolute value and percentage. This increase is largely due to the subsidy provided to help finance the acquisition of such assets. The impact of Fadama II on the value of privately owned productive assets was not significant for female-headed households or for beneficiaries in the lowest asset tercile (the poorest beneficiaries). Thus targeting of the poorest individuals through group- owned productive assets did not trickle down to private productive assets, which the program did not directly support. The value of private productive assets increased significantly for the middle and upper asset terciles. This find- ing is to be expected, given that acquisition of private assets requires invest- ment using the household’s own resources, which middle and high income beneficiaries are more likely to afford than are those in the lowest tercile. Household incomes improved substantially more for Fadama II benefi- ciaries than for nonbeneficiaries, with an average increase in real income resulting from participation in Fadama II of about 60 percent, well above the target of at least a 20 percent increase that the program set out to achieve in six years for half of its participants. About 42 percent of beneficiaries increased their incomes by at least 20 percent within one year of Fadama II implementation, indicating that the project nearly succeeded in achieving its income goal in its first year of operation.1
I
Comparison of the income impacts of the project across asset terciles shows that the project did not have a statistically significant impact on income among the poorest tercile (although the estimated coefficient was positive) and among female-headed households, despite the large and signifi-
1 However, as noted earlier, the increase does not control for the influence of other factors that could have contributed to an increase in beneficiary incomes.
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