BRAZILIAN STARTUP DOES PIONEERING DROUGHT RESEARCH IN THE STATE OF CEARÁ

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1 BRAZILIAN STARTUP DOES PIONEERING DROUGHT RESEARCH IN THE STATE OF CEARÁ MGov Brasil documented the impacts of droughts using a mobile system and discovered that these also affect farmers decision-making ability Photo by: Myrela Bauman MGov Brasil has done pioneering research with small farmers in the state of Ceará in partnership with researchers from Harvard (Cambridge, USA) and Warwick (England) universities, and the Meteorology and Water Resource Center of Ceará (Fundação Cearense de Meteorologia e Recursos Hídricos, FUNCEME). The study s goal was to evaluate the impacts of droughts farmers living conditions, using an innovative methodology that gathered information using cell-phones. The study was done on the eve of the São José holiday, a date considered a thermometer of beliefs about rainfall in the region. In March and June 2014, over two weeks on each month, the project conducted nearly 4,000 interviews with over 700 family farmers residing in 54 of the driest municipalities in the state such as Irauçuba, the second driest municipality in Ceará and the most desert-like to draw an accurate portrait of the reality faced by farmers affected by the drought. Photo by: Myrela Bauman In addition to gaining an understanding of basic aspects, like the impacts of droughts on income and consumption, the researchers also developed a methodology to testing cognitive function, attention, and memory. For first time, not just in Brazil, but worldwide, the way in which concerns about drought affect decision-making capacity was evaluated using cell-

2 phones, says Guilherme Lichand, a partner at MGov Brasil. Although previous studies have conducted similar testing through enumerators, the possibility of evaluating cognitive impacts using cell-phones is significantly innovative, enabling the replication of this type of study in even more challenging contexts, Lichand added. The cell-phone-based data collection methodology was selected because it is a lowcost way of reaching the study s target audience, which is scattered across the State and, in many cases, located in remote, hard-to-access regions. Cell-phone-based data collection has been successfully used by organizations such as the World Bank and UNICEF in Latin America and Africa, states Marcos Lopes, a partner at MGov Brasil. What we have implemented is even more innovative, because we do not need to distribute smartphones or cell-phones with specific software: we just use simple technology voice and texting to have the greatest possible reach. In addition, the respondent does not pay for any message sent or call received, and is compensated for participating. Considering the fact that over 87% of Brazilian households have a cellphone nearly 80% of them prepaid the methodology s potential reach is extremely far-ranging. Figure 2: Cell-phone penetration in Brazilian homes, by state Distrito Federal São Paulo Rio de Janeiro Santa Catarina Rio Grande do Sul Paraná Espírito Santo Goiás Mato Grosso do Sul Mato Grosso Minas Gerais Rondônia Roraima Amapá TocanMns Rio Grande do Norte Source: MGov Brasil Acre Amazonas Sergipe Pernambuco Bahia Paraíba Ceará Pará Alagoas Piauí Maranhão 0,0% 10,0% 20,0% 30,0% 40,0% 50,0% 60,0% 70,0% 80,0% 90,0% 100,0% Notes: (1) percentage of permanent private households that have landline and cellular telephones or just cell phones, according to data from the Demographic Census of IBGE; (2) States ordered by household per capita income from 2010 (IBGE).

3 The study divided into six rounds of questions documented important points that may assist with the development of public policies that are better suited to farmers actual needs. In cases in which polices already developed by the government are adequate, the results can justify the expansion of the number of people served. According to Eduardo Sávio Martins, President of FUNCEME, The study will provide significant information about how the public sector ought to design its governmental policies. In the case of FUNCEME, it will enable an assessment of its communication strategy with a wide array of final users of the climate information. The partnership with FUNCEME and with Ceará s Institute of Rural Extension and Technical Assistance (Empresa de Assistência Técnica e Extensão Rural do Estado do Ceará, EMATERCE) was essential for project s implementation. Taking advantage of FUNCEME s coordination capacity and EMATERCE s large reach, MGov Brasil developed a simple, objective, enrollment campaign that reached the target audience in an effective way. EMATERCE s extension workers state employees who interact on a daily basis with the farmers publicized the study s objectives; explained its potential benefits for developing policies for living in a semiarid climate that are better suited to the farmers needs; and got farmers to sign up. Figure 2: Farmer receives the sign-up leaflet (shown below) Photo by: Myrela Bauman The six interactions with participants included questions about their socio-demographic profile, income, consumption and production, along with cognitive tests. The development of the cognitive questionnaire involved a rigorous process of testing, based on a pilot done with a subset of participants that selected the questions better able to nail down the impacts of water scarcity on farmers memory, attention span, and impulse-control. Those who responded to the six waves got R$ 9 in airtime credit. Using a prize tied to the cell-phone is an important incentive for participation across the various survey waves. The retention rate over two weeks of collection was 97.5%, an extremely high index compared to any standard, says Rafael Vívolo, a partner at MGov. Another important part of the study, which also took advantage of the possibility of giving airtime credit incentives, was a mechanism for farmers to reveal their rainfall forecasts for their municipality. At the beginning of the study, participants had to classify their rainfall expectations

4 into one of three categories normal, above normal, or below normal, with respect to the historic average for their municipality and could update their estimate at the start of the following week. If their stated forecast corresponded to cumulative precipitation at the end of May, the farmer would get R$ 9 extra in airtime credit. This mechanism documented that over half the farmers disagreed with FUNCEME s climate-forecasting models, which historically have been much more accurate than the forecast broadcasted by the media, to which the farmers generally have access. The main results of the survey are highlighted below: The State program for subsidized seed distribution turned out to be more effective in municipalities with rainfall forecasts below the historical average: in these cases, 69% of farmers received seeds at no cost, versus 52% in municipalities where the forecast was around normal; Lack of accurate information about rainfall forecasts leads to losses in all cases. In municipalities with normal forecasts, pessimistic farmers buy less fertilizer wasting lucrative opportunities. Among those with a below-normal forecast, optimistic farmers buy more fertilizer, increasing their vulnerability to droughts; Despite the government s efforts to enroll farmers in the drought-insurance program, the sign-up rate is still low: 46% of family farmers without access to irrigation in the state of Ceará did not pay the sign-up fee for the program in The mechanisms for promoting and securing participation in the program need to be reviewed, since its cost is low: signing up costs just R$ while the premium corresponds to five installments of R$ 170. Many of these farmers live in municipalities with an official rainfall forecast below normal, in a situation of heightened vulnerability; Sending text messages a simple policy with nearly no cost has a significant impact on poorly informed farmers. After they received the FUNCEME forecast, 57% of optimistic farmers updated their expectations, potentially adjusting their productive decisions over time. Farmers who received text messages with below-normal rainfall forecasts perform more poorly on attention-span, memory and cognitive function tests. This result illustrates that droughts may have much broader impacts than their known direct effects on income. With the data in hand, researchers produced a rigorous analytical report with policy recommendations, shared with the State authorities in Ceará. In addition, given the relevance of the results and their potential impact for designing polices better-suited to the semiarid region, MGov Brasil and the State Government of Ceará studied the possibility of monitoring the interviewed farmers over 12 months, with the goal of documenting their living conditions throughout the dry season. High-frequency data collection, and following farmers over time, can inform policy design to better serve a group of people who are extremely vulnerable to climate shocks, about which little or nothing is known. More broadly, knowledge of the daily grind of urban or rural poverty is very limited, not just in Brazil, but around the world. We hope to contribute toward shrinking this gap, says Marcos Lopes.

5 MGOV BRASIL Founded in 2012 by partners Guilherme Lichand, Marcos Lopes, and Rafael Vívolo, MGov Brazil is a consulting firm specializing in public management and social impact, using mobile solutions for impact evaluation, monitoring and mobilization. CONTACT INFORMATION (+55 11) (+55 11) contato@mgovbrasil.com.br - Rua Vicente Leporace, 1534, São Paulo, SP CEP

6 Clipping The translation below refers to the news in portuguese of the next page. Guilherme Lichand, 27 Incentivizing mobile-phone data collection to improve management of social problems MGov Brasil Every December 12th, farmers from Ceará line up their salt crystals on a leaf or other flat surface and leave them exposed to the elements overnight. Each crystal represents a month of the rainy season, from January to June. The next morning, on Santa Lúcia s day, the crystals that dissolved indicate the months that will be rainy, and those that remain intact indicate months that will be dry. This curious, superstitious experiment is considered a reliable meteorological indicator by 44% of farmers in the region. Most of them also look to the sky, the birds, and the ants, and they listen to the advice of the so-called rain prophets, older men who have lived in the community for a long time and use both natural and religious symbols to forecast the amount of rain expected for the period. Although the Brazilian government provides weather forecasts on a regular basis through the Ministry of Science and Technology, farmers still trust the tradition to make decisions about their crops. In addition, the government tends to share the excessive optimism of the rain prophets, explains Guilherme Lichand, a young Brazilian economist who works with these communities. They forecast years of normal rainfall more frequently than geophysical models, he says. Proportionally, the models forecast periods of bad weather with much greater accuracy, he adds. In these cases of adverse climate conditions, farmers should invest their money in insurance for their crops rather than buying seeds and fertilizers that will be wasted. But to do so, they first need to have accurate information and forecasts that they deem reliable. This piece of information is essential in Ceará and other regions in Brazil for the people directly affected by different social problems and for those in charge of preparing policies aimed at mitigating them. Aware of this fact, Lichand and his partners Marcos Lopes and Rafael Vivolo founded MGov Brasil in 2012, a consulting firm that gathers data using voice calls and texting on matters of social interest to public managers. As Lichand explains, his contribution consists of using available tools to add and to disseminate information for impact evaluation, monitoring, and mobilization, in order to achieve social impact. In the case of Ceará s farmers, MGov created a system jointly with Warwick (UK) and Harvard (US) universities to encourage farmers from 53 municipalities to share more accurate information that they had about the weather each week over their cell phones. MGov ran a series of cognitive tests using an Automated Response Unit system in which a voice asks questions to the respondent, which they answer with a series of keystrokes. The farmer gets airtime credit to use on his own cell phone if he is able to accurately predict the amount of rain.

7 The next step for MGov will be to randomly share weather forecasts generated by geophysical models (from the Meteorology and Hidrological Resource Center of Ceará, FUNCEME) with a group of farmers to see if they update their forecasts with these data and if those who do so get better results. Lichand expects this strategy to clarify which options exist for creating low-cost policies to help the most vulnerable populations anticipate climate impacts. Participation using any cell phone The model developed by this young man, a former analyst in the Department of Poverty Reduction and Economic Management of the World Bank in Brazil, does not require people to have a smartphone to take part in the study. Access to this technology is very limited in Brazil, where only 30% of mobile devices sold are smartphones, and 80% of lines are prepaid. In reality, to remove the barrier imposed on the participants who have to pay for a call or a text to give their opinion, MGov uses a reverse billing system. The advantages of this strategy are that it can hinge on broader samples, which are more spatially scattered, that it can be easily replicated over time and that it discourages manipulation of responses, given that people tend to be honest when anonymity is guaranteed. Prizes are offered, and the interviewer is taken out of the equation. An example of this is another of MGov s campaigns aimed at evaluating the efficacy of the Leite Potiguar program in the state of Rio Grande do Norte, which distributes milk and a few byproducts for free to ensure its minimum intake by pregnant women, nursing mothers, children, and the elderly. The government suspected that the program was not reaching its goals and that many beneficiaries were reselling their milk to bolster their income. MGov reported that in fact, its efficacy was low. Sixty percent of those interviewed said that they had bought the necessary weekly quantity of milk, even before the start of the program. Although these data show that the government was distributing a resource for a need that was already being met, it also showed that the program contributed indirectly to income that poor families needed. This point-of-view suggests that the government would do better distributing cash, for instance, by adding on to the [federal government s flagship conditional cash transfer] Bolsa Familia, than through this type of in-kind transfer, says Lichand. He points out that even though the data support the low efficiency of the milk-distribution program, it also helped identify where it would work better. In municipalities where the program was locally managed rather than at the State level beneficiaries evaluated the frequency, quantity, and quality of milk distribution at higher standards. Based upon this piece of information, MGov suggested that, rather than scrapping the program, this organizational model should be expanded. The government accepted the proposal, replaced the management team in charge, and started a decentralization phase in According to Alejandro Ramirez, a consultant for Finance and Trading Education Programs at the Incyde Foundation (Spain), and a jury member of the MIT Technology Review Innovators under 35 - Brazil, Lichand is offering an effective answer to the government s real problems by using mass technology such as mobile phones. The information provided has a real impact on those who need it, says Ramirez.

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