Using Cell Phones to Monitor the Delivery of Government Payments to Farmers in India

Location:
Telangana, India
Sample:
5.7 million farmers across 30 districts
Timeline:
2018 - 2018
AEA RCT registration number:
AEARCTR-0002942

Partners:

In low- and middle-income countries, even well-designed social policies can face implementation challenges when it comes to the actual delivery of government services like teaching or disbursing benefits. Researchers conducted a randomized evaluation to test the impact of a cell phone-based monitoring system on the delivery of government-issued payments for farmers in Telangana, India.  The phone-based monitoring scheme significantly improved the likelihood of farmers ever receiving their payments as well as receiving them on time, indicating improved performance by on-the-ground service providers in delivering payments to farmers.  

Policy issue

In low- and middle-income countries, even well-designed social policies can face implementation challenges when it comes to the actual delivery of government services like teaching or disbursing benefits.1 One reason implementation can be challenging is that it can be difficult for governments to monitor the performance of the public workers in charge of delivering services to beneficiaries. Front-line workers are typically located across thousands of (often remote) communities, and government workers at all levels may misreport performance. One possible solution is to ask beneficiaries themselves if they are receiving what the program promises, and to use that information to monitor the performance of the public workers responsible for the delivery of benefits, but reaching all program beneficiaries can be challenging. Could the widespread adoption of mobile phones enable low-cost beneficiary monitoring, thereby increasing pressure on public servants to deliver public services well?

Context of the evaluation

In May 2018, the government of the Indian state of Telangana introduced the Rythu Bandhu (“Friend of a Farmer”) program, which disbursed USD$900 million (around 3.5 percent of the state’s annual budget) to farmers in each of the two cropping seasons that year. These transfers were delivered as checks and were meant to finance farmers’ investments in seeds and fertilizer and reduce their debt ahead of the planting season. The Telangana Department of Agriculture oversaw the distribution of checks in all 548 mandals (sub-districts) in Telangana, where local Mandal Agricultural Officers (MAOs) supervised agricultural extension agents who physically distributed the checks to farmers. The program aimed to reach every farmer registered as a landholder in the government’s digital land registry–a total of 5.7 million farmers–with a payment of Rs. 4000 (US$55) per acre.

Telangana is a relatively wealthy and well-administered state, compared to other states in India, and the government recorded a number of data points to monitor Rythu Bandhu implementation: MAOs recorded check distribution and banks reported whenever they received checks. Sixty percent of the state’s population lives in rural areas, and its citizens are relatively well-off: in 2016-17, Telangana’s per capita income was 53 percent higher than the national average.

Meanwhile, as in most low-income countries, mobile phone penetration rates in this setting have grown in recent years. Amongst the 5.7 million farmers included in the Government of Telangana’s land registry, 61 percent listed a contact cell phone number-a figure similar to the 62 percent mobile subscription rate across all low-income countries in 2017.

An officer conducting document verification for check distribution. Photo: Surya Banda | J-PAL

Details of the intervention

Researchers conducted a randomized evaluation to test the impact of a cell phone-based monitoring system on the delivery of government transfers to farmers in the state of Telangana. They randomly informed 122 of the state’s 498 MAOs about the cell phone-based monitoring system. Using a webinar and a follow-up letter, the Department of Agriculture informed these MAOs that researchers would call at least 100 of the farmers whose payments they were responsible for and ask questions about the implementation of the program. The Department of Agriculture also informed these MAOs that they and their supervisors would receive performance reports. The performance reports were only published after most of the MAOs’ work on the payment program was completed, meaning that impacts of the cell phone-based monitoring were driven by knowledge that they were being monitored, rather than the MAOs changing their performance based on feedback.

To collect information from farmers who were beneficiaries of Rythu Bandhu, the government contracted a call center to reach out to farmers and obtain information about their payments. Researchers used information from calls, as well as administrative bank and check distribution records, to determine whether and when farmers received checks and to consequently measure MAO performance. Researchers complemented this data with a short phone survey of MAOs themselves.

The remaining 376 MAOs were not told about the cell phone-based monitoring plan and received no reports, serving as the comparison group. While farmers in these mandals participated in the phone surveys, the MAOs themselves were not informed about any monitoring beyond the status-quo collection of administrative data.

Results and policy lessons

The phone-based monitoring scheme significantly increased the likelihood that farmers ever received their payments and that they received their payments on time, indicating that MAOs improved their performance in delivering payments to farmers.

Likelihood of ever receiving payments: Farmers in the cell phone-based monitoring group were 1.3 percentage points more likely to cash a check from the program (a 1.5 percent increase over a likelihood of 83 percent in the comparison group). This effect was largest for farmers with the smallest landholdings: farmers in the bottom quartile of landholdings saw an increase of 2.2 percentage points (a 3.3 percent increase from 68 percent) in the likelihood of cashing a Rythu Bandhu check. Farmers without cell phones saw equal improvements in overall check cashing rates, indicating that MAOs did not seem to target their improved efforts only on farmers who had phones.

On-time payments: The cell phone-based monitoring scheme increased the likelihood of farmers receiving their payments in time to buy seeds and fertilizers for the planting season by 2.3 percentage points (a 3.9 percent increase from 69 percent in the comparison group). Farmers without phones saw equal improvements in on-time check cashing relative to farmers with phones.

Overall, the phone-based monitoring program led to a USD$3.9 million increase in transfers that were delivered on-time and a USD$1 million increase in the amount ever delivered to farmers. Researchers estimate that the program would yield USD$33.1 million in on-time transfers and $8.6 million more per year if extended to the entire state. The program was highly cost-effective, costing 3.6 cents for each additional dollar delivered. These results suggest that phone-based monitoring can be implemented by governments at a large scale and deliver significant improvements in service delivery across millions of beneficiaries in a quick and cost-effective manner.

Muralidharan, Karthik, Paul Niehaus, Sandip Sukhtankar, and Jeffrey Weaver. “Improving Last-Mile Service Delivery using Phone-Based Monitoring”. Working Paper, January 2019.

1.
Muralidharan, Karthik, Jishnu Das, Alaka Holla, and Aakash Mohpal. “The Fiscal Cost of Weak Governance: Evidence from Teacher Absence in India.” NBER Working Paper No. 20299, July 2014. https://www.nber.org/papers/w20299