Severe weather conditions can undo eventhe best efforts of families to break free of poverty.Households that rely on subsistence or small-scale farmingare especially at the mercy of severe weather. Droughts andfloods wipe out crops, leaving families hungry or withoutanything to sell to pay for essentials such as school feesor medicines. Climate changes have made weather even morevariable in many countries, exacerbating problems such asdroughts, extreme temperatures and flooding. Policymakersseeking to offset the unexpected have increasingly used cashtransfer programs to help families through difficult times.But what makes a difference in the long-term? Are smallgrants or training programs effective methods to help farmhouseholds develop non-agricultural businesses, therebyenabling them to better manage weather shocks? To understandwhat might allow families to better manage risks, the WorldBank supported an evaluation of a pilot program in Nicaraguato encourage rural households to diversify beyondsmall-scale farming. The project found that two years afterthe program ended, households that received vocationaltraining or investment grants to start non-agriculturalbusinesses were better protected against the negativeeffects of severe drought than families that only receivedconditional cash transfers. These results suggest thathelping farmers develop other income-generating differentbusinesses can be an effective and sustainable approach toreducing poverty by protecting them against the financialrepercussions of severe weather and climate changes. ThisEvidence to Policy note was jointly produced by the WorldBank Group, the Strategic Impact Evaluation Fund (SIEF), andthe British governments Department for International Development.
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