South Asia Agriculture and Rural Growth Impact Note Series OCTOBER 2019 Weathering the Storm 3 Role of SHGs in mitigating the impacts of natural disasters This note is based on the paper Safety Nets and Natural Disaster Mitigation: Evidence from Cyclone Phailin in Odisha authored by P. Christian, E. Kandpal, HIGHLIGHTS N. Palaniswamy and  V. Rao.1 • Cyclone Phailin, one of the strongest tropical storms to hit India in the last two decades, made landfall in Odisha CONTEXT in October 2013 affecting 256,000 Climate change is expected to increase the incidents of extreme weather households. patterns such as cyclonic storms. Large parts of the developing world • Phailin led to sizeable decreases in including the Bay of Bengal region remain particularly vulnerable to adverse overall household consumption, while effects of such climate phenomenon. Odisha is located in one of the most expenditure on women’s goods showed disaster prone areas in the Bay of Bengal region with geographical features the greatest reduction. exacerbating strong winds into catastrophic storm surges. More than 80% of its 46 million population lives in rural areas, and it ranks amongst the • Self Help Groups (SHGs) play a positive most impoverished areas in the region with low levels of women’s welfare. role in buffering the community from the As of 2017, the Human Development Index (HDI) of Odisha is 0.599, well effects of natural disasters. below the national average of 0.639 but an improvement over the 2004 • In the wake of the disaster, areas where the value of 0.482. intervention (TRIPTI) was operating show Cyclone Phailin made landfall in Odisha on October 11, 2013 with a significant expansion in the number of wind velocities of 205-220 kilometers per hour on landfall (higher loans, whereas non-program areas relied than the 200 kmph velocity of Hurricane Katrina). The cyclone more on state-level aid programs. affected approximately 256,000 households and 1.3 million hectares of • TRIPTI offset the decline in total non- agricultural land. It also led to one of the largest emergency evacuations food expenditures after Phailin but had on record, with over a million people moved to shelters. Post no effect on food expenditure, perhaps disaster reconstruction and rehabilitation costs were estimated to be because non-food items may be easier to 1.45 billion USD. finance through credit. • There was a significant increase in women’s mobility in TRIPTI areas, increased 1. The original paper is available at http://documents.worldbank.org/curated/ engagement with local government, and en/808311522070466796/Safety-nets-and-natural-disaster-mitigation-evidence- greater involvement and knowledge of from-cyclone-Phailin-in-Odisha. village and state level politics. Impact Note 3: OCTOBER 2019 Figure 1: Rainfall shock caused by Cyclone Phailin Box 1:TRIPTI followed the program outlined below 400 • Build institutional capacity of Community Based Monthy rainfall - monthy median Organizations (CBOs), where SHGs at the village level were aggregated into federations at the Gram 200 Panchayat (GPLF) and Block Level. The main thrust at (mm) this stage was the management of group-based lending and a need-based prioritization of resource allocation 0 within the federation and linkages with services provided by the public and private sectors in order to -200 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec improve productive potential. Month • Improve access to credit through the provision of 2009 2010 2011 2012 2013 SHG grants called the Community Investment Funds (CIFs), with the intention that these would be used to meet the investment needs of the target poor, and that While policy makers have long believed that SHGs can be these needs would be identified through a facilitated used to effectively attenuate the effects of severe weather process of micro-investment planning. events, the overlap between the areas impacted by Cyclone Phailin and those participating in an impact evaluation • Link CIFs with livelihoods interventions that focused assessment of SHGs in the state, presented a concrete on improving productivity. opportunity to bear out this conviction and to study the • Harness the collective bargaining potential of gendered impact of climate disasters. these institutional platforms and enabling beneficiaries to negotiate with market actors for better economic INTERVENTION gains, and with service providers (government, private sector, and civil society) for better service delivery. In 2006, the Government of Odisha (GoO) formed the Orissa Poverty Reduction Mission (OPRM; reconstituted as Odisha Livelihoods Mission – OLM) to target poverty reduction under the aegis of the Department of Panchayati Raj. In Figure 2: Implementation of the OLM consonance with these objectives, the GoO had initiated an Identification of Participatory SHG program called Mission Sakthi in 2001. However, the Identification target poor Process program was plagued by various inefficiencies and theTargeted Rural Initiatives for Poverty Termination and Infrastructure TRIPTI was launched in 2009 with assistance from the World New SHGs Bank, and implemented by the Orissa Rural Livelihoods Inclusion of the Program (ORLP) to address the lacunae of inclusion, and Insitutional Poor in SHGs limited productive potential.2 TRIPTI aimed to address the Capacity Improve Credit Access for the Poor, Investment in Building Old SHGs high rates of rural poverty in Odisha, with a particular focus Productive Livelihoods of the Poor on increasing diversification of livelihoods and the reduction of debt, using SHGs as nodes of credit, and with a special New GPLFs focus on women’s empowerment, strengthening community Federation of ties and increasing community action. SHGs into Restructured The project was rolled out in a staggered manner amongst GPLFs village councils, and by 2015 TRIPTI had been implemented Microinvestment in 38 sub districts in 10 coastal districts of Odisha. The Planning for All Households administrative blocks receiving the intervention were identified through a participatory identification process, based Community Prioritization of on a situational analysis whereby an objective assignment Investment Investments Needs score calculated as a weighted average of the total number of Funds of Poor Households households, number of households belonging to lowest castes, number of SHGs deemed credit worthy and a Composite Livelihoods Development Index.3 In each district four blocks with the Inverventions to Improve Productive Potential highest score were chosen to receive the intervention. 2. Odisha was also the first state in the country to launch the National Rural Livelihoods Mission (NRLM) in 2011, in its bid to bring down rural poverty by promoting diversified and gainful self-employment to the rural poor. 3. Computed from census data, this index was based on the the following variables: Density of population per Sq Km of area, percent of agriculture workers to total male workers, net area sown per agriculture worker, percent of net irrigated area to net area sown, percent of cropping intensity, percent literate, number of primary schools per one lakh population, percent of villages electrified, percent of problem villages provided with safe drinking water, number of medical institutions per lakh of population. Impact Note 3: OCTOBER 2019 In 2016, at a project cost of 90.5 million USD, the Orissa KEY FINDINGS Rural Livelihoods Project had 750,000 members (over twice the original target) who gained access to credit of about Results showed that there were significant impact of the INR 10,000 each and were organized into 79,000 SHGs cyclone, yet there was substantial variation in the intensity and over 1,000 federations, with a high level of membership with which the households were affected. Following spatial among the poor and disadvantaged in the community based correlation strategies it was found that communities closer organizations. to the coast were affected more, which is in concordance with the fact that cyclones are strongest upon landfall.5 EVALUATION DESIGN Households’ expenditure per capita was significantly reduced in the wake of Phailin (by up-to a third in areas where The formalized rollout of TRIPTI was designed in the rainfall shock was the greatest), driven by lower per conjunction with an impact evaluation, whereby a capita food expenditure (consumption shock). Households baseline survey for the impact evaluation of TRIPTI was switched from purchased food to home grown food conducted in 2011, two years before Cyclone Phailin suggesting a coping strategy of drawing from stored food. made landfall in 2013, with data from 2875 households It was observed that TRIPTI offset the decline in total non- from 160 randomly selected villages. Thereafter, an food expenditures after Phailin but had no effect on food endline survey was conducted in November 2014 and expenditure, perhaps because non-food items may be easier revisited the households from the baseline. The surveyed to finance through credit. Health and education expenditure, communities overlapped significantly with areas affected by for instance, did not show much change after Phailin. the disaster. Interestingly, survey results observed a significant increase in Using spatial variation in the intensity of the rainfall shock expenditure on festivals whereby the worst affected areas and the staggered roll out of TRIPTI, researchers conducted spent more on Raja, a local festival that was celebrated a large-scale statistical examination of (1) the negative The increase in festival eight months after Phailin’s landfall.   consumption impacts of Cyclone Phailin, and (2) whether expenditure is balanced out in magnitude with a decrease in the prior presence of TRIPTI SHGs mitigated covariate risk expenditure on women’s goods, (including clothing, shoes, by improving access to credit and providing a platform for hygiene products, and toiletries purchased for women). It is government response.4 The team conducted a regression worth noting that the decrease in expenditure on women’s analysis to measure the differential effects of Phailin across goods was primarily observed in areas where the TRIPTI TRIPTI and non-TRIPTI areas, and econometric analysis to program was not active, either suggesting that TRIPTI may account for time in variant characteristics of the households have buffered women from the impact of Phailin, or that and their location. women in TRIPTI areas are more empowered, or both. Figure 3: Overlap in areas affected by Cyclone Phailin There was a significant increase in women’s mobility in and areas under TRIPTI implementation TRIPTI areas, which may be driven by their visits to SHGs meetings (17.8%) and to the bank (5.3%) alone. Women in TRIPTI areas were 5% more likely to use gram panchayat meetings to raise problems with domestic violence and alcoholism and to address issues with government welfare schemes. Their willingness to take collective and public action was 8% age points higher, and their willingness to pursue an institutional response to collective challenges was 12.8% points higher in TRIPTI areas. The analysis models average impacts of both Phailin and TRIPTI and accounts for auto-correlation using a differences- in-differences approach to assess whether the difference in observations are constant over time for reasons other than exposure to the cyclone or TRIPTI. However, due to the fact that extreme weather events are not randomly assigned and the small possibility that differential trends in the variables observed arose from sources other than TRIPTI or Phailin, the study must be regarded as suggestive evidence on the impacts of both extreme weather and the safety nets designed to mitigate them. 4. The evaluation design incorporated a Geographic Information Systems (GIS)-coded dataset from the Indian Meteorological Department’s (IMD) to measure the absolute deviation from the historical average of millimeters of rainfall at the nearest weather station together with data on household expenditures, consumption, credit-seeking, and political engagement from the TRIPTI surveys. 5. Households characteristics, vis a vis consumption, lending and political participation, were balanced according to cyclone intensity. Impact Note 3: OCTOBER 2019 TRIPTI households in cyclone-affected areas took out a Increased household expenditure on festivals may seem greater number of loans than in areas not affected. First contrary at a time of adversity. However, the findings time borrowing from SHGs as well as the loan amount of this study suggest that this may be a combination of a increased in the wake of Phailin, highlighting the credit- demonstration of gratitude for having survived a traumatic expanding role of TRIPTI.   This is particularly relevant event, households having more disposable income due to since estimates also show that Phailin reduced the amount the influx of post-Phailin aid, or private social and economic of borrowing in non-TRIPTI areas. The government returns such as lower prices of food higher social status and extensively used TRIPTI infrastructure to distribute aid to more invitations to meals from other families. cyclone-affected areas. TRIPTI areas had increased awareness of the last village CONCLUSION council meeting, as opposed to non-TRIPTI areas. TRIPTI It was demonstrated that theTRIPTI areas affected by the cyclone areas also found it easier to facilitate community meetings showed greater community action and self-sufficiency, with in order to provide information about aid programs or SHGs increasingly used by governments to impart and leverage leverage aid. aid for maximum impact. The higher degree of awareness in TRIPTI areas of village council meetings and decision reflects a POLICY LESSONS central role played by the SHGs in shoring up the community post disaster, promoting effective community action, and The rise of non-food expenditures in TRIPTI areas indicate providing hope and dignity to their women members. that SHGs can help rebuild capital assets of households impacted by natural disasters and that easy access to credit Further research needs to be done to fully understand the can mitigate risks for communities exposed to them. correlation between group based community lending and natural disaster relief. As climate change becomes a real This study found empirical evidence to support two long threat to an increasing number of rural communities, there held conjectures in the development community that (1) is urgent need to look into the effectiveness of community women are disproportionately vulnerable to climate change groups like SHGs to serve as social security nets in the wake and that (2) they buffer their households in the wake of of these disasters, as well as their cost-effectiveness when adverse economic shocks. compared to other disaster response programs. ABOUT THE Impact Note SERIES This note is part of the South Asia Agriculture and Rural Growth Impact Note Series, that seeks to disseminate research and analysis focused on World Bank financed rural, agriculture and food systems programs in India. Series editors: Abhishek Gupta and Gayatri Acharya. Photographer: Rohit Jain. We are grateful for the generous support from The South Asia Food and Nutrition Security Initiative (SAFANSI), Gates Foundation, Ministry of Rural Development and various state rural development departments. This note was prepared by Deepti Kakkar (Consultant, World Bank) and published by the Food & Agriculture Global Practice at The World Bank, 1818 H Street, NW Washington, DC 20433 USA. Website: www.worldbank.org. For further information or copies please email: galex2@worldbank.org. Disclaimer: The findings, interpretations, and conclusions expressed in this note are entirely those of the author(s) and should not be attributed in any manner to the World Bank, to its affiliated organizations or to members of its Board of Executive Directors or the countries they represent. REFERENCES Global Data Lab, Sub National HDI, https://hdi.globaldatalab.org/areadata/shdi/, Research working paper; no. WPS 8039. Washington, D.C. : World Bank Last Retrieved 17 Feb 2019 Group, 2017 D. Singh, and A. Jeffrie, India Cyclone Phailin in Odisha October 2013, Rapid S. Joshi, N. Palaniswamy and V. Rao, Impact Evaluation Framework and Results: Damage Needs Assessment Report. Government of Odisha, 2013 Odisha Rural Livelihoods Project, World Bank P. Christian, E. Kandpal, N. Palaniswamy,   V.  Rao, Safety Nets and Natural Disaster P. Christian, E. Kandpal, N. Palaniswamy,V. Rao, Safety Nets and Natural Disaster Mitigation : Evidence from Cyclone Phailin in Odisha. Policy Research Working Mitigation : Evidence from Cyclone Phailin in Odisha. Policy Research Working Paper; No. 8375, World Bank, 2018 Paper; No. 8375, World Bank, 2018 Government of India, National Rural Livelihoods Mission Framework for Independent Evaluation Group (IEG) IN: Orissa Rural Livelihoods Project Implementation, 2011 (P093478) Implementation Completion Report (ICR) Review, 2016 World Bank, A targeted rural livelihoods program in Orissa (English). The South P. Christian, E. Kandpal, N. Palaniswamy,V. Rao, Safety Nets and Natural Disaster Asia Food and Nutrition Security Initiative (SAFANSI).Washington, D.C.:World Mitigation: Evidence from Cyclone Phailin in Odisha. Policy Research Working Bank Group, 2017 Paper; No. 8375, World Bank, 2018 Independent Evaluation Group (IEG) IN: Orissa Rural Livelihoods Project T.A. Carletonand S.M. Hsiang, Social and Economic Imacts of Climate, Science (P093478), Implementation Completion Report (ICR) Review, 2016 Volume 353, Issue 6304, 09 September 2016 S. Joshi, N. Palaniswamy and V. Rao, Impact Evaluation Framework and Results: S. Joshi, N. Palaniswamy and V. Rao, Impact Evaluation Framework and Results: Odisha Rural Livelihoods Project Odisha Rural Livelihoods Project, World Bank P. Christian, E. Kandpal, N. Palaniswamy,   V. Rao, Safety Nets and Natural Disaster V. Rao, “Celebrations as Social Investments: Festival Expenditures, Unit Price Mitigation : Evidence from Cyclone Phailin in Odisha. Policy Research Working Variation and Social Status in Rural India.” The Journal of Development Studies, Paper; No. 8375, World Bank, 2018 38: 71–97, 2001 S. Majumdar, V. Rao, P. Sanyal, On the frontlines of scaling-up : a qualitative analysis World Bank Group Website,Tripti Offers Hope and Dignity to Women in Rural of implementation challenges in a CDD project in rural India (English). Policy Odisha - http://www.worldbank.org/en/news/feature/2015/09/01/tripti-offers- hope-dignity-to-women-rural-odisha, Last Retrieved 17 February 2019