Weather shocks and food price seasonality in Sub-Saharan Africa: Evidence from Niger

Abstract

Semi-Arid regions of Sub-Saharan Africa are vulnerable to weather shocks, especially rural areas where households depend on rainfed agriculture and access to stable food markets are limited by high transaction costs. Understanding how weather shocks affect rural Sub-Saharan African households through both production and market price changes is crucial in designing sustainable and effective programs to increase resilience. Weather shock impacts on agricultural production and market prices are well documented in Africa. But little is known about the impacts of weather shocks on market price seasonality, which is an important determinant of food security. We investigate the distinct impacts of positive and negative rainfall shocks on millet production and millet price seasonality in Niger using district-level longitudinal production and price data, along with high-resolution rainfall data. We find that a one standard deviation decrease in seasonal rainfall from historical averages is associated with declines in millet market price initially after harvest, but strong upward pressure on market prices 6 months after harvest. As a result, drought exacerbates existing price seasonality, which in turn can amplify negative impacts on households. Social protection programs need to account for potential increases in seasonal price variability in the design of programs to enhance household resilience to weather shocks.