COSA Evaluates the PPI for Agricultural Supply Chains >

Frank Ballard

The Committee on Sustainability Assessment (COSA), a global consortium that researches and promotes science-based impact assessment tools for agricultural producers, has released a synthesis of its 2013 report “Testing the Progress out of Poverty Index in the COSA Platform.” In 2012, COSA realized that a widely-applicable poverty assessment tool would complement its own suite of tools, and this report presents the findings of its review of tools and testing of the PPI.

COSA’s primary means of measuring the financial wellbeing of producers had been to measure production costs, access to finance, production assets, net income, and total household revenue; however, due to the difficulty of collecting accurate measures of income and revenue and their inability to reflect financial burdens, such as illness, COSA began looking for a complementary approach to assessing poverty. With support from the Ford Foundation, COSA evaluated a number of poverty measurement tools that could be integrated into its surveys correlated with more traditional measures of financial wellbeing. Because of the PPI’s transparency, wide acceptance, and ability to relate financial condition to national and global poverty line, COSA decided to pilot the PPI.

The PPI was embedded within COSA Producer Surveys and collected from approximately 2,500 producers across four projects in Mexico, Guatemala, Peru and Colombia. The findings were positive and support the PPI's use in agricultural supply chains. In the studies, there was a strong negative correlation between net income from crops and the poverty rate calculated by the PPI, reinforcing expectations. There was also a clear relationship between the PPI and food security.

In addition, COSA found that in Colombia environmental degradation and poverty were related, though not necessarily in a causal way. The data from Colombia also showed that farms with higher numbers of environmentally sound management practices were less likely to be poor than those with fewer.

The results provided COSA with confidence to incorporate the PPI into its impact assessment framework. Initial feedback from its clients has been positive. COSA, with help from Grameen Foundation, now plans to identify how poverty data provided by the PPI works with and improves the information from other indicators and how they can use the PPI to track poverty over time.

The full report can be download here.