Climate Variability, Location and Diversification: Livestock Assets in Consumption Smooth

Dekha Sheikh and Corinne Valdivia

Climate Variability, Location and Diversification: Livestock Assets in Consumption Smoothing in Shock and Non-shock Seasons in two Regions of Kenya This study focuses on the coping strategies developed by households in five Kenyan villages, experiencing different climate effects of ENSO in 1998-99, and assesses the consumption smoothing roles played by large and small animals and other strategies through non shock and shock agricultural seasons, using both quantitative analysis and participatory approaches. Our approach builds on past versions of the permanent income hypothesis model that incorporated household characteristics and assets to explain the consumption behavior of households in contexts where incomplete markets exist. Our model incorporates livestock assets as a mechanism to approximate non-monetary savings not captured by the transitory income. The Tropical Livestock Units of large and small ruminants are incorporated to the model to evaluate their impact on consumption by type of liquid asset. Our paper determines whether farm households smooth their consumption in the short term as predicted by the model and we assess whether the model helps to explain consumption smoothing in the different seasons (two seasons of ENSO and three of drought between 1994 and 1999) for the same farm households, and whether ownership of assets (large and small ruminants) play a role as a risk reducing strategy and thus affect the consumption-smoothing behavior of farm households. The vulnerability of communities and individuals was measured through the development of a Food Security Index that measures coping strategies in times of shock. Shock events in the 1990s and coping strategies were identified and ranked by groups in the community. This ranking was used to measure an individual household’s food security index. In the process, monetary and non-monetary coping strategies were identified. The use of non-monetary, as well as both short and long-term coping strategies were characteristic of the semi-arid, mixed crop-livestock farming system of Machakos district. The coping strategies and Food Security Index analysis show that both sites at Machakos are more food insecure and hence vulnerable to climatic stress. Proxies to capture non-monetary strategies are proposed.

File: Sheikh 2009 - Seasonal consumption smoothing in Kenya.pdf