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Assessment of an Outsourced Agricultural Extension Service in the Mutasa District of Zimbabwe

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Assessment of an Outsourced Agricultural Extension Service in the Mutasa District of Zimbabwe Vol. 7(5), pp. 142-149, May, 2015 DOI: 10.5897/JAERD2015.0677 Articles Number: C6AB86C53089 Journal of Agricultural Extension and ISSN 2141-2154 Copyright ©2015 Rural Development Author(s) retain the copyright of this article http://www.academicjournals.org/JAERD Full Length Research Paper Assessment of an outsourced agricultural extension service in the Mutasa district of Zimbabwe Machila M.1, Lyne M.1,2* and Nuthall P.1 1Faculty of Agribusiness and Commerce, Lincoln University, New Zealand. 2University of KwaZulu-Natal, South Africa. Received 6 February, 2015; Accepted 28 April, 2015 Zimbabwe has a pluralistic agricultural extension system. In addition to the public extension service, donors contract private service providers to deliver extension services in specific project areas. This study assesses the impact of an outsourced extension service on rural households in the Mutasa district of Zimbabwe’s Manicaland Province, and examines the financial cost and benefit of this service. The extension service was delivered by a local agribusiness firm and funded by USAID. The study analyses survey data gathered from 94 client and 90 non-client rural households. Propensity score matching was used to identify a subset of comparable clients and non-clients. Descriptive statistics were compared across these groups, and the impact of the extension service on each of several outcome variables was estimated using two-stage least squares regression with instrumental variables to account for selection bias. The results show that the outsourced extension service contributed significantly to household crop income, net crop income and expenditure on farm inputs and services. In addition, clients perceived a range of socio-economic benefits such as better diets and health, improved product quality and job creation. An analysis of the financial cost and benefit of the extension service suggests an annual net incremental benefit of US$11,587, representing a 30% return on the investment made by the donor to finance the service. This estimate excludes socio-economic benefits attributed to the extension service. Key words: Smallholder extension service, impact assessment, net incremental benefit, Zimbabwe. INTRODUCTION Agricultural extension services typically include capacity funding from donors for specific agricultural programmes development through training, strengthening innovation (Saravanan, 2008; Oladele, 2011). processes, building linkages between farmers and other The public component of Zimbabwe’s extension system agencies, and helping to strengthen farmers' bargaining is delivered by the Department of Agricultural, Technical position through appropriate institutional and and Extension Services (AGRITEX). AGRITEX is the organisational development (Sulaiman and Hall, 2002). largest public rural intervention agency in Zimbabwe with This form of extension service is common in Zimbabwe representatives at the national, provincial, district and and is funded largely by the treasury with supplementary village levels (IFPRI, n.d.). Sharp reductions in tax *Corresponding author. E-mail: [email protected]. Author(s) agree that this article remain permanently open access under the terms of the Creative Commons Attribution License 4.0 International License Machila et al. 143 revenue and donor funding that followed the introduction Mutasa district approximately 100 km north-east of Mutare, the fourth largest city in Zimbabwe (Mushunje, 2005). The valley is of Zimbabwe’s controversial ‘fast track’ land reform home to an estimated 1177 households located in five villages. programme in 2000 reduced the AGRITEX budget Agriculture is the main economic activity. Annual rainfall averages (Government of Zimbabwe and FAO, 2011; Anseeuw et 850-1000mm, but is restricted largely to the summer months from al., 2012) and compromised the effectiveness of its October to April. Crops grown include maize, bananas, coffee, tea, extension service (Hanyani-Mlambo, 2002; Saravanan, tubers and legumes (Mtisi, 2003; Mushunje, 2005). Topography 2008; Gwaradzimba, 2011). This encouraged donors to ranges from steep to gently undulating slopes and most farmers irrigate crops using gravity irrigation. Approximately 600 of the experiment with outsourcing. smallholders farming in the study area use the agricultural Outsourcing is a way of contracting private service extension service provided by Favco under contract to Fintrac providers (including private sector firms, NGOs and (Fintrac, 2014). The service includes training and advice on farming farmers' organisations) to deliver information and ser- practices (especially bananas and subsistence food crops), loans vices characterised largely as public goods (Heemskerk for seasonal farm inputs, and help accessing markets. et al., 2008). These service providers are often paid from both public and donor funds. In Zimbabwe, outsourced agricultural extension services are usually a component Sampling method and data collection of projects that are fully funded by donors as most donors The methods applied to the study’s two key objectives draw on the stopped channelling funds through the Treasury in 2002. same primary data gathered from farm households using a rigorous The donors contract private service providers and sampling design. Two sample surveys were conducted between monitor their performance (Anseeuw et al., 2012). This April and June 2014. The first was a representative sample of all differs from the approach adopted in Mozambique where households in the study area. A two-stage cluster sampling method private service providers are contracted by the was used to select these households. At the first stage of sampling, two of the five villages (primary stage units or PSUs) were selected government, but does not imply a lack of collaboration with probability proportionate to an estimate of their size. These with, or accountability to, the Zimbabwean Government. estimates were based on a physical count of households Griffith and Figgis. (1997) describe the potential (secondary stage units or SSUs) in each village. Households in benefits of outsourcing relative to public service delivery. each of the selected villages were then listed and a simple random These include cost savings, improved effectiveness and sample drawn from each list using a constant sampling fraction development of the private sector. They also refer to (20%). This approach produces a self-weighting sample that can be analysed as if it were a simple random sample. A total of 152 potential challenges such as reduced accountability of households were surveyed, representing almost 13% of the government for the quality and quantity of contracted estimated 1177 households in the study area. services, and collusive tendering practices. However, The second survey was a census survey of all ‘new’ clients there is very little empirical information about the costs serviced by Favco in the study site. New clients were defined as and benefits of outsourced extension services or about those smallholders who with the firm’s assistance, planted tissue the impact of these services on small scale farmers in culture banana seedlings in 2012 to harvest an improved banana crop between January and June 2014. A total of 32 new clients southern Africa (Heemskerk et al., 2008). This study aims were surveyed. The samples together yielded 184 respondents. Of to provide stakeholders with objective information about these, 94 were households that had been serviced by Favco these aspects of an outsourced extension service in (including the 32 ‘new’ clients) and 90 were non-clients, i.e. nc=94 Zimbabwe. and nnc=90. Although there are several donor-funded projects A uniform and structured questionnaire was administered in personal interviews with the de facto head of each sample operating in Zimbabwe that provide outsourced extension household and with all ‘new’ project clients. The questionnaire services, this study examined only one project funded by gathered information on, inter alia: household and farm charac- USAID. The study area was located within the Mutasa teristics; farm enterprises, seasonal input purchases, and income district in Zimbabwe’s Manicaland province where from products sold in the 2013/2014 season; use of advisory, outsourced extension services are well established and market and other services provided by Favco and the season in private service providers are actively recruiting new which each of these services were first used by the household. It was intended to solicit information from clients on their willingness farmer clients. The project is managed by a private US- to pay for Favco’s extension service but this question was removed based company, Fintrac Inc. Fintrac contracts several in case it discouraged farmers from participating in the survey. NGO’s and agribusiness firms to service different parts of its programme in the target area. The study area is serviced by Favco, a local company that processes fruit Measuring the impact of Favco’s extension service on farmers and vegetables. To assess the impact of a project in the absence of randomisation, it is important to compare similar households within the client (treatment) and non-client (control) groups (Rosenbaum and Rubin, METHODS 1983; Mendola, 2007; Khandker et al., 2010). In this study, propensity score matching (PSM) was used to identify a subset of This research examines the impact of an outsourced extension client and non-client households similar in respect of observed service on
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