Large-scale biofuel production and food security of smallholders: Evidence from Jatropha in Madagascar

Large-scale agricultural investments in land and biofuel feedstock production have been found to lead to positive employment, growth and poverty reduction effects. However, these outcomes depend on the institutional context and the type of investment. This article aims to provide insights into the relationship between wage work for a large-scale Jatropha project and household food security, measured as dietary diversity and food provision during the lean season. After the initial hype and the subsequent downfall of Jatropha, new projects are still being undertaken. Yet there is little evidence quantifying the long-term impacts of large-scale Jatropha production on smallholders' livelihoods. This article addresses the gap by using five rounds of panel data collected between 2008 and 2013 from 390 randomly selected households in the vicinity of a Jatropha project in Madagascar. Labour demand by the plantation declined substantially after the build-up phase, and incomes from wage work were mostly used for food and other necessities. Impacts were estimated with the help of fixed effects models. Jatropha wage work contributed significantly to dietary diversity but did not reduce the more subjective lack of food during the lean season. One reason might be that households stored significantly less rice over time. Moreover, food production and consumption were highly influenced by seasonality, drought and locust shocks, which implies that complementing income creation with agricultural development strategies might have further positive effects on livelihoods and food security.