Using the Progress Out of Poverty Index in Agricultural Value Chains – Kenya Tea

 

The Progress Out of Poverty Index (PPI), developed by Mark Schreiner of Microfinance Risk Management L.L.C. and Grameen Foundation, is a simple poverty assessment tool that collects objective information to determine household poverty levels. The country-specific PPI scorecard measures economic poverty, by focusing on various non-financial indicator categories, including family, housing, education, and ownership of durable goods.

 

The PPI provides organizations with poverty information in terms of globally accepted international poverty lines and nationally recognized poverty lines. Organizations can understand if they are reaching populations living under the $1.25 day/PPP or national poverty lines. If users continue to track poverty status over time, they can understand whether they are moving out of poverty.

 

Like many organizations, the Sustainable Food Lab is excited about the prospect of the PPI as a simple and credible tool for estimating the likelihood of poverty in smallholder agricultural supply chains. In recent work to develop a shared approach to common indicators and metrics for measuring the sustainability of smallholder supply chains, the PPI is being carefully considered as an approach to estimating poverty likelihood. However, before unreservedly recommending the PPI as a suggested approach for measuring smallholder livelihoods—particularly if it replaces other measures of income and assets—the community engaged in developing these smallholder metrics wanted to build confidence that the PPI would be applicable for households in rural and strictly agricultural supply chains.

 

Throughout 2013, the Food Lab worked with Unilever to help develop an approach to tracking the livelihood status of the smallholder farmers in their supply chains. This goal, laid out in Unilever’s Sustainable Living Plan, states that Unilever, “will work with suppliers as well as other key actors in the supply chain networks to help smallholder farmers improve their agricultural practices and thus enable them to become more competitive. By doing so [Unilever] will improve the quality of their livelihoods.”

 

The Food Lab helped design a performance measurement survey that gathered farm level data to determine whether farmer productivity and livelihoods were, in fact, improving. Unilever piloted the survey among smallholder producers in three of their supply chains in late 2013.

 

The first pilot study took place in Kenya with farmers selling to the Kenyan Tea Development Authority (KTDA). Data was collected in October of 2013 from 640 households representing approximately 8000 tea farmers from 8 Kenya Tea Development Agency tea factories.

 

Please follow this link to read the entire case study: Sustainable Food Lab- PPI in Ag Value Chains Study-Kenya Tea