Abstract
AbstractDespite 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 households’ 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 toward those 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 and significant 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 and impacts of weather risk among farming systems and livelihoods highlights the need for more tailored livestock sector policies and interventions.
Highlights
Understanding these responses and adjustments in livestock production and marketing decisions is crucial for prioritizing livestock-related investments and designing risk mitigating strategies for those relying on livestock, e.g., livestock insurance programs
We show that those households living in variable and unpredictable weather conditions are less likely to engage in livestock production for markets
We only report and discuss marginal effects associated with our key variables of interest, while our full results are reported in Tables A2 to A4 in the Appendix
Summary
Does household livestock production respond to access to markets and weather conditions? Despite several studies showing that crop production responds to weather conditions (e.g., Rosenzweig and Binswanger 1993; Dercon 1996; Jalan and Ravallion 2001; Howden et al 2007; Mitter et al 2015; Amare et al 2018; Jagnani et al 2018) and access to markets (e.g., de Janvry et al 1991; Fafchamps 1992: Zeller et al 1998; Van Dusen and Taylor 2005), there exists scant empirical evidence on whether and how households’ livestock production decisions respond to varying weather risk and access to markets. We cannot distinguish if the relationship between the proximity of markets and modern livestock use is supply or demand driven, it is likely to have implications on the productivity of herds These findings are relevant for livestock producers and pastoralists in east Africa, which historically have had limited access to these critically important input markets (e.g., Barrett et al 2006; Negassa and Jabbar 2008). This implies that livestock producers factor in the unpredictability of their production environment when making decisions about which type and how many livestock assets to hold, depending on various production motives These responses and patterns vary across livelihood zones – most of these stylized responses and impacts are only visible and significant in the ASAL regions of Ethiopia, where livestock herding remains a dominant source of livelihood. Index-based livestock insurance is one of these instruments, providing a viable means to reduce the consequences of weather shocks (Chantarat et al 2013; Jensen and Barrett 2016; Jensen et al 2017)
Sign-in/Register to view highlights & summary 
Published Version (
Free)
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call