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Access to markets, weather risk, and livestock production decisions: Evidence from Ethiopia

Author

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  • Abay, Kibrom A.
  • Jensen, Nathaniel D.
Abstract
Despite several studies showing the effect of access to markets and weather conditions on crop production, we know quite little on whether and how livestock production systems respond to variation in weather risk and access to markets. In this paper, we study whether and how livestock production responds to access to markets and varying weather risk. We also explore whether such responses vary across livelihood zones and livestock production systems. We study these research questions using information on the livestock production, ownership, and marketing decisions of households in Ethiopia. We find that households living close to markets are more likely to engage in market-oriented livestock production and use modern livestock inputs. We also find that households exposed to more unpredictable weather are less likely to engage in livestock production for markets. Rather, they are more likely to engage in livestock production for precautionary savings and insurance. Furthermore, greater rainfall uncertainty influences livestock portfolio allocation towards those types of livestock which can be easily liquidated, while also discouraging investment in modern livestock inputs. However, these responses and patterns vary across livelihood zones and production systems - most of these stylized responses and impacts are more pronounced in the arid and semi-arid lands of Ethiopia, where livestock herding remains a dominant source of livelihood. Those households relying only on livestock production seem more sensitive and responsive to weather risk and weather shocks. The heterogeneity in responses to and impacts of weather risk among farming systems and livelihoods highlights the need for more tailored livestock sector policies and interventions.

Suggested Citation

  • Abay, Kibrom A. & Jensen, Nathaniel D., 2020. "Access to markets, weather risk, and livestock production decisions: Evidence from Ethiopia," ESSP working papers 138, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:fpr:esspwp:138
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    2. Ricardo Alonso Colmenares-Florez & María Esther Alcántara-Gutierrez, 2021. "La helicicultura como alternativa de desarrollo sostenible: un estudio de caso," Revista CEA, Instituto Tecnológico Metropolitano, vol. 7(14), July.
    3. Richard A. Gallenstein & Jon Einar Flatnes & John P. Dougherty & Abdoul G. Sam & Khushbu Mishra, 2021. "The impact of index‐insured loans on credit market participation and risk‐taking," Agricultural Economics, International Association of Agricultural Economists, vol. 52(1), pages 141-156, January.
    4. Jose, Anu, 2024. "Income shocks and intrahousehold resource allocation: evidence from rural Ethiopia," MPRA Paper 121873, University Library of Munich, Germany.
    5. Tabe-Ojong, Martin Paul Jr & Heckelei, Thomas & Rasch, Sebastian, 2022. "Aspirations and Investments in Livestock: Evidence of an aspiration failure in Kenya," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322435, Agricultural and Applied Economics Association.
    6. Abay, Kibrom A. & Tafere, Kibrom & Berhane, Guush & Chamberlin, Jordan & Abay, Mehari H., 2023. "Near-real-time welfare and livelihood impacts of an active war: Evidence from Ethiopia," Food Policy, Elsevier, vol. 119(C).
    7. Tabe-Ojong, Jr., Martin Paul & Godana, Guyo, 2022. "Are Agro-clusters Pro-Poor? Evidence from Ethiopia," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322432, Agricultural and Applied Economics Association.
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    9. Meyer, Jessica, 2023. "How do forests contribute to food security following a weather shock? Evidence from Malawi," World Development, Elsevier, vol. 169(C).
    10. Yitayew, Asresu & Kassie, Girma T. & Yigezu, Yigezu A., 2023. "Market participation and pastoral welfare in drought-prone areas: A dose-response analysis," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 1415-1429.
    11. Abay,Kibrom A. & Hirfrfot,Kibrom Tafere & Berhane,Guush & Chamberlin,Jordan & Abay,Mehari H., 2022. "Near-Real-Time Welfare and Livelihood Impacts of an Active Civil War : Evidence from Ethiopia," Policy Research Working Paper Series 10004, The World Bank.
    12. Marther W. Ngigi & Ulrike Mueller & Regina Birner, 2021. "Livestock Diversification for Improved Resilience and Welfare Outcomes Under Climate Risks in Kenya," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 33(6), pages 1625-1648, December.

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    Keywords

    ETHIOPIA; EAST AFRICA; AFRICA SOUTH OF SAHARA; AFRICA; livestock; livestock production; weather; risk; market access; marketing; portfolio allocation;
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