FAO Agricultural Development Economics Working Papers

This paper examines the impacts of the El Niño during the 2015/2016 season on maize productivity and income in rural Zambia. The analysis aims at identifying whether and how sustainable land management (SLM) practices and livelihood diversification strategies have contributed to moderate the impacts of such a weather shock. The analysis was conducted using a specifically designed survey called the El Niño Impact Assessment Survey (ENIAS), which is combined with the 2015 wave of the Rural Agricultural Livelihoods Surveys (RALS), as well as high resolution rainfall data from the Africa Rainfall Climatology version 2 (ARC2). This unique, integrated data set provides an opportunity to understand the impacts of shocks like El Niño that are expected to get more frequent and severe in Zambia, as well as understand the agricultural practices and livelihood strategies that can buffer household production and welfare from the impacts of such shocks to drive policy recommendations. Results show that households affected by the drought experienced a decrease in maize yield by around 20 percent, as well as a reduction in income up to 37 percent, all else equal. Practices that moderated the impact of the drought included livestock diversification, income diversification, and the adoption of agro-forestry. Interestingly, the use of minimum soil disturbance was not effective in moderating the yield and income effects of the drought. Policies to support livestock sector development, agroforestry adoption, and off-farm diversification should be prioritized as effective drought resiliency strategies in Zambia.

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.

Crop diversification is an important policy objective to promote climate change adaptation, yet the drivers and impacts of crop diversification vary considerably depending on the specific combinations of crops a farmer grows. This paper examines adoption determinants of seven different cropping systems in Malawi, Zambia and Mozambique, and the impact of their adoption on maize productivity and income volatility – using a multinomial endogenous treatment effect model. These cropping systems consist in different combinations of four categories of crops: dominate staple (maize), alternative staples, legumes, and cash-crops. The study finds that relative to maize mono-cropping systems, the vast majority of systems have either neutral or positive effects on maize productivity, and either reduce or have neutral effects on crop income volatility. In particular, cropping systems that include legumes produce better outcome in most cases than those that feature cash crops. From a policy perspective, three recurrent determinants of diversification are found. First, private sector output market access is an important driver of diversification out of maize mono-cropping. Policies crowding in private output market actors can help to promote a wide range of more diverse cropping systems. Second, proximity to public marketing board buying depots discourages the adoption of more diverse cropping systems. Therefore, reforms to these institutions must be part of any diversification strategy. Finally, in all countries and for all systems, land size is a key determinant of adopting more diverse systems. Thus, land policy is an integral element of any boarder diversification strategy.

The prioritization of rice as a strategic food and cash crop in Rwanda has paid dividends, with production increasing by one-third during 2010–2015. However, production expansion has failed to keep pace with growing consumption demand. In 2015, around 30 percent of national consumption was met by imported long grain rice. The paper aims to single out the constraints which have been preventing the Rwandan rice sector to fully seize market opportunities in recent years. Looking at Nominal Rates of Protection faced by agents in the rice value chain over 2005–15, we find rice producers enjoy significant price incentives, mostly as a result of protective trade measures. Other factors, however, appear to be hindering investments in land, the adoption of modern inputs, and the production of high quality rice that can more readily substitute imports. This evidence is used along with recent literature and stakeholder interviews to formulate policy recommendations.

Good institutions are a fundamental pre-requisite to successfully achieve structural transformation in growing developing countries (UNECA, 2016). Sub-Saharan Africa is experiencing a rapid growth but a weak and slow structural transformation process, which is mainly characterized by the reallocation of labour from agriculture to low skilled services. The focus of this paper is to explore how political and economic institutions affect structural transformation in a panel of 11 sub-Saharan African countries. Our empirical analysis reveals a positive and statistically significant effect of quality of institutions and economic freedom measures on structural transformation between sectors, which translates into movement out of agriculture. Better institutions appear to not improve productivity within sectors, however results highlight the important role played by institutions in facilitating reallocation or resources across sectors. Our findings suggest that improving the legal system, providing a stable macroeconomic environment, and improving freedom to exchange across borders will facilitate structural transformation processes in sub-Saharan African countries. We finally recommend that measures undertaken by governments should be included in a set of targeted policies designed according to countries’ characteristics.