We evaluated the impacts of the Ethiopian Productive Safety Net Program (PSNP) on rural households' holdings of livestock and forest assets including trees. Using panel data, we applied both regression analysis and propensity score matching. We found no indication that participation in PSNP induces households to disinvest in livestock or trees. In fact, households that participated in the program increased the number of trees planted, but there was no increase in their livestock holdings. We found no evidence that the PSNP protects livestock in times of shock. Shocks appear to lead households to disinvest in livestock, but not in trees. Our results suggest that there is increased forestry activity as a result of PSNP, and that improved credit access encourages households to increase their livestock holdings.
Improving farm-level use of multiple climate change adaptation strategies is essential for improving household food security, particularly against a backdrop of a high risk of climatic shocks. However, the empirical foundation for understanding how farm households choose multiple climate-smart practices is far from being established. In this paper, the effects of household, farm and climatic factors on farmers' decisions to use multiple adaptation practices are analysed. A survey of 921 farm households and 4312 farm plots combined with historical climate data in the Nile Basin of Ethiopia is explored using multivariate and random effect ordered probit econometric models. Results show agricultural production can be characterized by complementarities between adaptation practices. This result is important to designing packages of adaptation practices. The econometric results confirm that social capital, tenure security and climatic shocks are important determinants of the choice of the type and number of adaptation practices. The results suggest the need for carefully designing combinations of adaptation strategies based on agro-ecological conditions.
The paper analyzes the economic impacts of climate change-induced fluctuations on the performance of Ethiopia's agriculture, using a countrywide computable general equilibrium (CGE) model. We model the impacts on agriculture using a Ricardian model, where current agricultural production is modelled as a function of temperature and precipitation, among other things, and where future agriculture is assumed to follow the same climate function. The effect of overall climate change is projected to be relatively benign until approximately 2030, but will become considerably worse thereafter. Our simulation results indicate that, over a 50-year period, the projected reduction in agricultural productivity may lead to reductions in average income of some 20 per cent compared with the outcome that would have prevailed in the absence of climate change. This indicates that adaptation policies -both government planned and those that ease autonomous adaptation by farmers -will be crucial for Ethiopia's future development.
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