98 | SMALLHOLDER DIARIES 14. Key sources on the diaries methods and findings are Collins et al. (2009) and Kenya Financial Sector Deepening Trust (2014). Other references indicated as appropriate. 15. All data were collected between April 2014 and July 2015, including the initial question- naires and additional qualitative modules. Data collection on household cash flows started in June 2014 and ended in June 2015. The module on risk was administered in July 2015. 16. All data and questionnaires are available at http://www.cgap.org/topics/financial-innova- tion-smallholder-families. 17. “In-kind” refers to goods, services, and transactions not involving money (i.e., payments in-kind, barter transactions). 18. The Financial Diaries methodology was developed by David Hulme of the University of Manchester and Stuart Rutherford of SafeSave. 19. Smallholders Diaries households were selected purposefully and not randomly, and the samples are not statistically representative of smallholder farmers in these areas or in the three countries. There are additional reasons the Diaries methodology does not use a random sample. The study is able to include only households that are willing to commit to a year-long study and, to minimize attrition issues, are likely to stay in the community. Households initially oversampled to include 286 households and the study ended with 273. Households left the study by leaving the study villages, seasonal migration, and occasionally by the prompting of the research team due to concerns about the house- hold’s willingness to be forthcoming about important sources of income. The research firms provided small cash gifts at surprise times throughout the study to thank respon- dents for their participation. The value of these cash gifts were a very small share of income for most households. The gifts were tracked as income and expenditures enabled by these extra inflows were also tracked. 20. Figures for assets were self-reported. 21. The exchange rates used in this paper, calculated as the average exchange rate during the period of the study, are as follows unless otherwise indicated: Mozambique Metical to the U.S. Dollar: 34.66; Tanzania Shilling to the U.S. Dollar: 1934.72; Pakistan Rupee to the U.S. Dollar: 99.60. 22. In the terminology of the Smallholder Diaries, wage labor generates salaried income that has been at least tacitly agreed to be earned on a regular basis. This is distinct from casual labor, which is irregular income from short-term employment, such as work on construc- tion sites or helping with the harvest on other people’s farms. 23. The several income sources identified by the Smallholder Diaries are defined in Annex 2. Note that there may be multiple, distinct income streams from each type of income source in Smallholder Diaries households (e.g., income from cultivation of four crops, wages from casual labor on two different jobs). Each individual income source is counted and tracked separately. 24. Some income sources even go negative in a given month, since the Diaries charted net income from the source. In agriculture production and self-employment, some expenses may be incurred before revenue, resulting in negative net income for a given month. While agricultural revenues in Pakistan can be high, agricultural income is calculated by subtracting farming expenses, which can be substantial, from gross revenue. 25. This includes any crops consumed, traded, or given away for any reason. 26. In the Smallholder Diaries a distinction was made between self-generated agricultural production income and income from casual labor related to agriculture (e.g., working on a neighbor’s farm). Someone providing casual labor is not the main decision-maker or investor in those crops or livestock and their work starts and stops at the will of someone outside the household. 27. For a detailed exploration of value chain finance, see AgriFin 2015 (forthcoming) and Miller and Jones (2010). 28. Commercial smallholders in tight value chains have the capacity to generate reliable, high- quality outputs that are sold on a contract basis through relatively highly organized value chains. See Christen and Anderson (2013). 29. The village in the Tanzania sample focused on potato production had the same pattern, with expenses dipping to their lowest during hardship months. 30. Covariant risk arises when many households in one area are adversely affected by a single phenomenon such as a natural disaster, epidemic, unexpected change in world prices, macroeconomic crisis, or civil conflict. Individual risks, in contrast, randomly affect individual households. 31. Most Tanzanian respondents evaluated the cost of crops destroyed in the field as zero, since they were unable to put a monetary value on the loss. 32. Strategies to manage risk are fairly well documented. See for example, Skees, Hazell, and Miranda (1999) on crop insurance; Miranda and Farrin (2012) on index-based insurance in low-income countries; Mahul and Skees (2012) on index-based livestock insurance; and Hazell, Pomareda, and Valdés (1986). 98 |