One of the largest and best known seasonal income support programs in the world is India's National Rural Employment Guarantee Act (NREGA). Under this program, all rural workers in the country are in theory entitled to 100 days of guaranteed employment per year and are primarily hired for projects that support local community development, such as irrigation and road construction. Other common rural poverty programs include promoting financial services such as microfinance (a concept that also originated in South Asia), crop insurance, and support for savings (Table 1). Many governments around the world have also experimented with cash transfers—either unconditional or conditional on a specified activity like school attendance—and transfers in the form of food subsidies or free food distribution have been deployed in acute situations around the world for decades.
| Policy . | Design Strengths . | Caveats . |
|---|---|---|
| Guaranteed work | Self-targeted | Discourages migration in search of jobs elsewhere |
| Supports local infrastructure development by design | Costly | |
| Basic cash or food guarantee | Universal targeting ensures even those who cannot work receive benefits | Costly, with leakage to nonpoor households |
| Implementation costs also very high for food distribution | ||
| Crop or agricultural insurance | Transfers tied to actual agricultural shocks | Does not address seasonality of agricultural employment and outputs, only shocks to it |
| May encourage risk-taking and investment by softening downside of shocks | Does not address idiosyncratic shocks | |
| Documented low take-up rates | ||
| Possible abuse of subsidized system by nonagricultural households (as documented in Mexico; World Bank 2013) | ||
| Microcredit and savings for agriculture | Supports investment in agricultural enterprise (versus subsistence) | Less relevant for landless poor Documented low take-up rates in general |
| Microcredit for nonfarm enterprises | Supports diversification of income away from agriculture in rural areas | Relies on profitable business opportunities in rural areas |
| Assumes entrepreneurial skill; training is costly and results mixed | ||
| Support for seasonal migration | Self-targeted | Relies on having temporary employment opportunities within reasonable traveling distance |
| Policy . | Design Strengths . | Caveats . |
|---|---|---|
| Guaranteed work | Self-targeted | Discourages migration in search of jobs elsewhere |
| Supports local infrastructure development by design | Costly | |
| Basic cash or food guarantee | Universal targeting ensures even those who cannot work receive benefits | Costly, with leakage to nonpoor households |
| Implementation costs also very high for food distribution | ||
| Crop or agricultural insurance | Transfers tied to actual agricultural shocks | Does not address seasonality of agricultural employment and outputs, only shocks to it |
| May encourage risk-taking and investment by softening downside of shocks | Does not address idiosyncratic shocks | |
| Documented low take-up rates | ||
| Possible abuse of subsidized system by nonagricultural households (as documented in Mexico; World Bank 2013) | ||
| Microcredit and savings for agriculture | Supports investment in agricultural enterprise (versus subsistence) | Less relevant for landless poor Documented low take-up rates in general |
| Microcredit for nonfarm enterprises | Supports diversification of income away from agriculture in rural areas | Relies on profitable business opportunities in rural areas |
| Assumes entrepreneurial skill; training is costly and results mixed | ||
| Support for seasonal migration | Self-targeted | Relies on having temporary employment opportunities within reasonable traveling distance |
Source: Authors' compilation.