Risk Belief, Producer Demand, and Valuation of Improved Irrigations: Results from Field Experiments in Mt. Kilimanjaro

This paper systematically estimates the potential benefit of introducing improved irrigation schemes in Mt. Kilimanjaro to help rain dependent farmers cope with the risks of climate change. The study uses Contingent Valuation Method (CVM) to elicit farmers’ Willingness to Pay (WTP) for eliminating the risks of crop loss by accessing improved irrigation schemes. Data for the analysis were gathered using a double bounded survey from over 200 randomly-sampled farmers in 15 villages. The study makes a contribution to the applied welfare literature and should also be useful for policymakers in Africa. The policy contribution consists of valuation of improved irrigation in the presence of climate change risks. The applied welfare contribution consists of empirical evidence about the impact of farmer’s risk aversion on welfare valuation. Pratt and Zeckhauser (1996) argue on conceptual grounds that in the absence of complete contingent claims market, individual WTP per unit of risk reduction will depend significantly on the level of risk and the magnitude of reduction that is offered. The present study captures individual farmer’s risk exposure by constructing an index for farmers’ expected rainfall. Since mean WTP is nonlinear in its parameters, mean WTP is computed based on the Krinsky and Robb (1986) method, which simulates the confidence interval and the achieved significance levels (ASL) for testing the null hypothesis that WTP≤0. The results show that farmers with lower expectations about future rainfall are willing to pay more for accessing the improved irrigation scheme. In addition, Mt. Kilimanjaro farmers are willing to pay up to 10% of their income to have access to improved irrigation canals. Assuming a 5% discount rate, the study found that farmers will reimburse the cost of building the irrigation scheme after 7 to 9 years.Willingness to Pay, Climate Change, Irrigation, Risk Belief, Agricultural and Food Policy, Environmental Economics and Policy, Food Security and Poverty, International Development, Q12, Q18, Q25, Q51, Q56,

Weather Vulnerability, Climate Change, and Food Security in Mt. Kilimanjaro

This study estimates the impact of rainfall variation on livelihood in Mt. Kilimanjaro using the Ricardian approach to capture farmers’ adaptation strategies to cope with climate change risks. The data for the analysis were gathered from a random sample of over 200 households in 15 villages and precipitation from rainfall observation posts placed in each of the surveyed villages. The precipitation data provide information on the effect of moisture at critical months in the growing season. Due to prevalence of intercropping among local farmers, the present study develops a multivariate model that assumes endogeneity between crop yields. Doing so allows the study to capture adaptation strategies that smallholders use by diversifying farm portfolio. The results indicate that Mt. Kilimanjaro agriculture is vulnerable to precipitation variation. However, farm vulnerability is heterogeneous across space, crops and, months. Location varying inputs are responsible for substantial percentage of crop yield. The study found ambiguous evidence about the ability of irrigation usage to reduce crop vulnerability to precipitation variation, but suggests that proper cost benefit analysis ought to be done in order to measure the welfare value of irrigation. In terms of future food security, climate simulations reveal that by 2029, it will no longer be ideal to produce coffee in Mt. Kilimanjaro if precipitation annually decreases by a minimum rate of 2%. While maize production will also suffer severe production reduction, banana production will decrease but not in an alarming rate by 2029.Climate Change, Precipitation Variability, Food Security, Irrigation, Agricultural and Food Policy, Environmental Economics and Policy, Food Security and Poverty, International Development, Q1, Q5,

Optimal rainfall insurance contracts for maize producers in Ghana’s Northern Region

The risk of food insecurity due to climate change in developing countries has encouraged development partners to seek new approaches to improve the resilience of subsistence agriculture to covariate shocks. Such innovative approaches include investment in safety nets such as rainfall insurance. However, a policy question remains: How does one determine the practicality of rainfall insurance for a particular district? This paper attempts to fill this gap by assessing the viability of rainfall insurance contracts for agricultural production in Ghana’s Northern Region. Using a stop-loss framework, an optimal contract is determined by choosing its parameters by maximizing the objective function in the form of covariance between crop loss and indemnity payment, the objective function given a predetermined fair premium rate. The theoretical contract is implemented using monthly rainfall and annual maize crop yield data from 1998 to 2004 from 12 districts in the Northern Region under varying premium rates. We conclude that rainfall insurance may not be viable for all districts in the Northern Region; however, the contracts are likely to be viable in districts that exhibit a positive Pearson correlation coefficient between maize yield loss and indemnity payments.Climate change, maize yield, rainfall insurance,

Soil erosion risk assessment on some soils of the Lubumbashi plain, D.R. Congo

peer reviewedLe contrôle de l’érosion hydrique des sols est l’une des préoccupations importantes en agriculture pluviale, notamment sous les climats tropicaux. Dans la plaine de Lubumbashi, deux sites agricoles (ferme Kasapa et le périmètre agroforestier de Mukoma) ont été étudiés en vue d’y évaluer le risque d’érosion hydrique du sol. Des cartes thématiques des différents facteurs d’érosion, tels que décrits dans l’Équation universelle de pertes de sol, ont été intégrées dans un Système d’Information Géographique, permettant ainsi de : (1) démêler leur complexité et leur interdépendance dans l’analyse des risques d’érosion et (2) cerner l’impact et la contribution de chacun d’eux aux pertes en sol. Cette démarche a permis de : (1) hiérarchiser les différentes zones de sites étudiés selon leurs degrés de sensibilité à l’érosion et (2) déterminer le taux d’érosion par le ruissellement en nappe (30,8 t/ha/an en moyenne pour la ferme Kasapa et de 3,6 t/ha/an pour le site de Mukoma). Par ordre d’importance, les facteurs décisifs qui contrôlent l’érosion hydrique dans la plaine de Lubumbashi sont : la pente, l’érodibilité des sols et la couverture végétale

Risk Belief, Producer Demand, and Valuation of Improved Irrigations: Results from Field Experiments in Mt. Kilimanjaro

This paper systematically estimates the potential benefit of introducing improved irrigation schemes in Mt. Kilimanjaro to help rain dependent farmers cope with the risks of climate change. The study uses Contingent Valuation Method (CVM) to elicit farmers’ Willingness to Pay (WTP) for eliminating the risks of crop loss by accessing improved irrigation schemes. Data for the analysis were gathered using a double bounded survey from over 200 randomly-sampled farmers in 15 villages. The study makes a contribution to the applied welfare literature and should also be useful for policymakers in Africa. The policy contribution consists of valuation of improved irrigation in the presence of climate change risks. The applied welfare contribution consists of empirical evidence about the impact of farmer’s risk aversion on welfare valuation. Pratt and Zeckhauser (1996) argue on conceptual grounds that in the absence of complete contingent claims market, individual WTP per unit of risk reduction will depend significantly on the level of risk and the magnitude of reduction that is offered. The present study captures individual farmer’s risk exposure by constructing an index for farmers’ expected rainfall. Since mean WTP is nonlinear in its parameters, mean WTP is computed based on the Krinsky and Robb (1986) method, which simulates the confidence interval and the achieved significance levels (ASL) for testing the null hypothesis that WTP≤0. The results show that farmers with lower expectations about future rainfall are willing to pay more for accessing the improved irrigation scheme. In addition, Mt. Kilimanjaro farmers are willing to pay up to 10% of their income to have access to improved irrigation canals. Assuming a 5% discount rate, the study found that farmers will reimburse the cost of building the irrigation scheme after 7 to 9 years

Weather Vulnerability, Climate Change, and Food Security in Mt. Kilimanjaro

This study estimates the impact of rainfall variation on livelihood in Mt. Kilimanjaro using the Ricardian approach to capture farmers’ adaptation strategies to cope with climate change risks. The data for the analysis were gathered from a random sample of over 200 households in 15 villages and precipitation from rainfall observation posts placed in each of the surveyed villages. The precipitation data provide information on the effect of moisture at critical months in the growing season. Due to prevalence of intercropping among local farmers, the present study develops a multivariate model that assumes endogeneity between crop yields. Doing so allows the study to capture adaptation strategies that smallholders use by diversifying farm portfolio. The results indicate that Mt. Kilimanjaro agriculture is vulnerable to precipitation variation. However, farm vulnerability is heterogeneous across space, crops and, months. Location varying inputs are responsible for substantial percentage of crop yield. The study found ambiguous evidence about the ability of irrigation usage to reduce crop vulnerability to precipitation variation, but suggests that proper cost benefit analysis ought to be done in order to measure the welfare value of irrigation. In terms of future food security, climate simulations reveal that by 2029, it will no longer be ideal to produce coffee in Mt. Kilimanjaro if precipitation annually decreases by a minimum rate of 2%. While maize production will also suffer severe production reduction, banana production will decrease but not in an alarming rate by 2029

A mathematical programming approach

The risk of food insecurity due to climate change in developing countries has encouraged development partners to seek new approaches to improve the resilience of subsistence agriculture to covariate shocks. Such innovative approaches include investment in safety nets such as rainfall insurance. However, a policy question remains: How does one determine the practicality of rainfall insurance for a particular district? This paper attempts to fill this gap by assessing the viability of rainfall insurance contracts for agricultural production in Ghana’s Northern Region. Using a stop-loss framework, an optimal contract is determined by choosing its parameters by maximizing the objective function in the form of covariance between crop loss and indemnity payment, the objective function given a predetermined fair premium rate. The theoretical contract is implemented using monthly rainfall and annual maize crop yield data from 1998 to 2004 from 12 districts in the Northern Region under varying premium rates. We conclude that rainfall insurance may not be viable for all districts in the Northern Region; however, the contracts are likely to be viable in districts that exhibit a positive Pearson correlation coefficient between maize yield loss and indemnity payments.Non-PRIFPRI1; GRP32WCA