How Do Extreme Weather Events Affect Livestock Herders' Welfare?

This paper examines the impact of the harsh 2012 winter on livestock herding households in Kyrgyzstan and identifies policy options to increase household resilience to such shocks. While existing studies mostly focus on rainfall shocks in tropical or dry climate areas, this analysis examines the exceptionally harsh winter that hit Kyrgyzstan in 2012, which resulted in the death of 25 000 animals. Using a unique household panel survey, merged with observed temperature data, the analysis finds that, on average, the negative effects of the winter shock on household welfare are significant and persistent over time, leading to a 5 percent and a 8 percent decrease in households’ food consumption expenditure in the short- (2011–2013) and medium-run (2011–2016), respectively. When disaggregating by income quantiles, the evidence shows that negative impact is concentrated in the upper quantiles of the welfare distribution. Several policy options are identified as effective in mitigating the negative welfare impacts of the weather shock. First, supporting households to restock their herds following weather shocks is found to significantly improve medium-term welfare by 10 percent relative to those that did not restock. Restocking efforts can be addressed in a holistic manner that takes into account immediate household needs, while simultaneously building long-term resilience in the livestock sector. This may include mitigating animal losses through the development of local forage markets that increase the availability of winter forage, combined with efforts to improve the genetic pool of livestock species through breeding programmes that select for resiliency traits. Second, results show that households living in regions with higher access to public veterinary services had significantly better welfare outcomes following the winter shock. Improvements of veterinary services and strengthening community-based organizations focusing on livestock and pasture development may help herding households to cope with weather shocks.