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Livelihood Diversification and Vulnerability to Poverty in Rural Malawi

ESA Working Paper No. 15-02










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    Diversification, climate risk and vulnerability to poverty in rural Malawi 2015
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    This brief summarises the results of a recent analysis of a nationally representative farm household survey in Malawi linked with climate data to assess the impact of climate variability on farm household welfare, the patterns of diversification farmers adopt, and how different policy factors such as fertilizer subsidies, extension services and credit can affect diversification choices and ultimately welfare patterns. We look closely at three main factors that can affect both diversification ch oices and subsequent impacts on household welfare. First, “push” factors, such as high climate variability make farming a risky business, and can lead farmers to diversify in order to reduce that risk. However, this may lead to lower, though more stable, welfare levels. On the other hand, “pull” factors, such as greater education or wealth, enable households to take advantage of a wider range of opportunities not available to the less wealthy or poorly educated. These “pull” factors should incre ase welfare, but do not necessarily create greater stability. Finally, we look at the institutional context within which households are situated to evaluate how it impacts both diversification choices and resulting welfare outcomes.
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    Cropping systems diversification to enhance productivity and adaptation to climate change in Malawi 2019
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    Widespread maize monocropping in Malawi exposes farmers to significant livelihood risk in the context of increasing climate variability. 36 percent of rural households grow maize in monocrop. These farmers are often poor and land constrained, and experience low levels of productivity and high production volatility. The effects of crop diversification on farm productivity and income volatility in Malawi varies across cropping systems. Maize in combination with legumes is the only cropping system in Malawi that is significantly associated with an increase in productivity and a reduction in crop income volatility. Contrary to expectations, cropping systems with 3 or more crops do not significantly reduce crop income volatility relative to maize monocropping. Market weaknesses for many non-maize crops in Malawi limit the benefits from diversification. Higher volatility in prices of many non-maize crop is a disincentive to the adoption of diversified systems and pushes farmers toward monocropping. Household constraints are a key barrier to adopting more diverse cropping systems. Sufficient household assets, particularly land, enable households to overcome the investment and risk costs associated with crop diversification. Coordination between private and public investments are required to improve the incentives for diversification in Malawi. A coordinated effort to strengthening input and output markets for non-maize crops, combined with public support to overcome household-level resource constraints to diversification (including public works programmes, input subsidies, and cash transfers) is necessary to promote widespread crop diversification.
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    Welfare impacts of climate shocks: evidence from Tanzania 2016
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    Sub-Saharan Africa (SSA) remains the world’s most food-insecure region characterized by high levels of child mortality and poverty and low levels of human and physical capital (FAO, 2009). Countries in SSA, including Tanzania, heavily depend on a smallholder-based agricultural sector, which makes their welfare and food security particularly vulnerable to climate change (Barrios et al., 2008). The goal of this study is to provide a comprehensive analysis of the impact of weather risk on rural hou seholds’ welfare in Tanzania using nationally representative household panel data together with a set of novel weather variation indicators based on interpolated gridded and re-analysis weather data that capture the peculiar features of short term and long term variations in rainfall and temperature. In particular, we estimate the impact of weather shocks on a rich set of welfare indicators (including total income, total expenditure, food expenditure and its share in total expenditure and calori e intake) and investigate whether and how they vary by different definitions of shocks - capturing changes in levels and variations over different time periods. We find that both rainfall and maximum temperature variability exert a negative impact on welfare (i.e. no consumption smoothing) and that households that have adopted SLM practices are able to achieve income-smoothing. We also find that the most vulnerable rural households are much more affected by a rainfall deficit compared to the hou seholds in the top income quantile. Results underline the key role extension services play in enhancing adaptive capacity to reduce vulnerability to adverse weather conditions, as well as the importance of targeting the most vulnerable households in policy interventions to improve food security in the face of weather shocks.

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