CEGA Development Innovation Ventures

Testing a budgeting intervention to address seasonal hunger.

With support from Development Innovation Ventures (DIV), researchers at the Center for Effective Global Action (CEGA) conducted a randomized controlled trial (RCT) with over 800 subsistence farmers in 113 villages in Zambias Eastern province to evaluate a low-cost behavioral intervention designed to help smallholder farmers use a structured planning process to allocate their annual income to last until the next harvest.

The intervention, carried out shortly after the annual maize harvest, consists of training farmers to use simple planning boards divided into various income and expense categories, helping participants to generate realistic spending estimates and budget their harvest income to smooth consumption throughout the year.

Farmers keep the planning boards to remind them of their plans and receive physical labels for their bags of maize that reflect their spending plan for the upcoming year.

The evaluation found that the intervention increased savings for the families who had been randomly assigned to receive the intervention.

As discussed in the policy brief, four months after the intervention, these households entered the hunger season with 20 percent more savings (approximately an additional months worth of savings) than their control group counterparts.

These extra savings meant that farmers were 32 percent less likely to take second jobs to meet their subsistence needs and therefore could dedicate more time and savings to strategic investments in their farms, which resulted in 9 percent higher crop revenues during the following years harvest.

These results affirm that a simple 45-minute budget forecasting exercise can help farmers stretch savings longer into the hunger season and ultimately increase their farm investment and harvest the following year.