Effects of Ill Health and Weather Variability on Savings

This paper examines the effects of households’ shocks on saving behaviour. It investigates the possibility that households save ex ante to buffer against adverse weather and health shocks. The relatively high prevalence rate of HIV/AIDS in Kenya combined with rain fed agriculture implies great uncertainty for rural livelihoods. Adopting a methodology previously used on cross-sectional data (Paxson, 1992), the paper examines the level of households precautionary behaviour. This is done by estimating the marginal propensity to save out of transitory income over a period of 18 months. The results show that while households may exhibit some level of prudence, the marginal propensity to save out of transitory income is about a third of what the permanent income hypothesis postulates. Seasonality influences prudence behaviour, with stressful seasons likely to depress substantially the level of precautionary saving. The presence of HIV/AIDS illness lowers savings and raises per capita consumption. While reduced savings may seem to jeopardize future investments, the rise in consumption when the human asset is threatened, is in accordance with behaviour of forward-looking agents when future income is endogenous to current asset shock. The desire to smooth the health (asset) stock outweighs the desire (ability) to smooth future consumption and therefore savings decline. As a consequence, consumption for the HIV-afflicted households is relatively more volatile. While these findings are in agreement with a buffer stock model, they go against previous predictions that, AIDS medical costs will be met by reducing both consumption and savings in a balanced manner, and not necessarily be drawn disproportionately from own savings. A rise in consumption and a drop in savings may be a signal that the relationship is likely to be disproportionate.Household, Shocks, Savings, HIV/AIDS, Agricultural and Food Policy, Community/Rural/Urban Development, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, International Relations/Trade, Marketing, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies,

The Effects of HIV/Aids on Agricultural Production and Poverty in Kenya

Although HIV/AIDS prevalence in Kenya has shown a downward trend in the recent years, it continues to impact negatively on agricultural production and food security in rural areas. The declining trends in crop production remain a challenge for development efforts. This study examines the extent to which AIDS has impacted on agricultural production, incomes and food security. Using a sample of 212 households, the study examines changes in welfare of households experiencing death and illness associated with HIV/AIDS condition. Poverty incidence and severity are observed to be higher among affected and non-affected households. The higher poverty levels among the affected cohort can partly be explained by lower crop and livestock production. In the absence of formal insurance mechanisms, medical costs take precedence over crop and livestock intensification; any credit that may be available goes to cater for medicare; the few assets available are disposed for purposes of meeting health needs. There is less land under crops and more fallow among the affected households. The effects are worse for farm households in the marginal areas an indication that there may be need for special programmes for arid and semiarid areas. Given that poverty seems to reinforce the spread of the HIV/AIDS and that once AIDS strikes it becomes a driver of poverty, the study adds further support to views that intervention strategies need to deal with poverty and HIV/AIDS problems concurrently.Food Security and Poverty, Health Economics and Policy,

Does the environment in which ICT-based market information services (MIS) projects operate affect their performance? Experiences from Kenya

The need to provide agricultural information to farmers has led to emergence of numerous ICTbased MIS projects in developing country. These projects aim at promoting commercialization of smallholder agriculture and subsequently their welfare. This study examines the how the environment in which such ICT-based MIS affect their performance. It specifically uses the DrumNet project, an ICT-based MIS, to assess how the socio-economic, physical, political and physical environment in the project areas affected its performance. The study finds that those transaction-related problems, especially strategic default, deriving from these environmental factors greatly undermined the performance of DrumNet forcing it to relocate severally. It discusses policy implications of these findings.ICT-based MIS projects, the DrumNet model, operational environment, performance, Kenya, Research Methods/ Statistical Methods,

Investigating the Role of Poultry in Livelihoods and the Impact of HPAI on Livelihoods Outcomes in Africa: Evidence from Ethiopia, Ghana, Kenya and Nigeria

In this paper we investigate the role of poultry in the livelihoods portfolios of households and the impact of supply and demand shocks that may be caused by Highly Pathogenic Avian Influenza (HPAI) on various livelihoods outcomes of households in four Sub-Saharan African (SSA) countries. The study countries include Ethiopia and Kenya in East Africa and Ghana and Nigeria in West Africa. These countries represent a spectrum of SSA countries in terms of disease status, role of poultry sector and means of disease spread. By using nationally representative household level secondary data and discrete choice methods (probit model and zero inflated negative binomial model) we profile the household, farm and regional characteristics of those households who are most likely to keep poultry, and those who are most likely to be engaged in intensive poultry production, i.e., keep larger household flocks. We estimate the impact of the disease outbreaks and scares/threats on livelihood outcomes by using matching methods (i.e., propensity score matching). The results of this study generate valuable information regarding the role of poultry in the livelihoods of small-scale poultry producing households and the livelihood impacts of HPAI induced demand and supply shocks. Such information is critical for the design of targeted and hence efficient and effective HPAI control and mitigation policies.Highly Pathogenic Avian Influenza (HPAI), demand shock, supply shock, livelihoods, probit model, zero inflated negative binomial model, propensity score matching, Livestock Production/Industries,

Effects of Ill Health and Weather Variability on Savings

This paper examines the effects of households’ shocks on saving behaviour. It investigates the possibility that households save ex ante to buffer against adverse weather and health shocks. The relatively high prevalence rate of HIV/AIDS in Kenya combined with rain fed agriculture implies great uncertainty for rural livelihoods. Adopting a methodology previously used on cross-sectional data (Paxson, 1992), the paper examines the level of households precautionary behaviour. This is done by estimating the marginal propensity to save out of transitory income over a period of 18 months. The results show that while households may exhibit some level of prudence, the marginal propensity to save out of transitory income is about a third of what the permanent income hypothesis postulates. Seasonality influences prudence behaviour, with stressful seasons likely to depress substantially the level of precautionary saving. The presence of HIV/AIDS illness lowers savings and raises per capita consumption. While reduced savings may seem to jeopardize future investments, the rise in consumption when the human asset is threatened, is in accordance with behaviour of forward-looking agents when future income is endogenous to current asset shock. The desire to smooth the health (asset) stock outweighs the desire (ability) to smooth future consumption and therefore savings decline. As a consequence, consumption for the HIV-afflicted households is relatively more volatile. While these findings are in agreement with a buffer stock model, they go against previous predictions that, AIDS medical costs will be met by reducing both consumption and savings in a balanced manner, and not necessarily be drawn disproportionately from own savings. A rise in consumption and a drop in savings may be a signal that the relationship is likely to be disproportionate

The Effects of HIV/Aids on Agricultural Production and Poverty in Kenya

Although HIV/AIDS prevalence in Kenya has shown a downward trend in the recent years, it continues to impact negatively on agricultural production and food security in rural areas. The declining trends in crop production remain a challenge for development efforts. This study examines the extent to which AIDS has impacted on agricultural production, incomes and food security. Using a sample of 212 households, the study examines changes in welfare of households experiencing death and illness associated with HIV/AIDS condition. Poverty incidence and severity are observed to be higher among affected and non-affected households. The higher poverty levels among the affected cohort can partly be explained by lower crop and livestock production. In the absence of formal insurance mechanisms, medical costs take precedence over crop and livestock intensification; any credit that may be available goes to cater for medicare; the few assets available are disposed for purposes of meeting health needs. There is less land under crops and more fallow among the affected households. The effects are worse for farm households in the marginal areas an indication that there may be need for special programmes for arid and semiarid areas. Given that poverty seems to reinforce the spread of the HIV/AIDS and that once AIDS strikes it becomes a driver of poverty, the study adds further support to views that intervention strategies need to deal with poverty and HIV/AIDS problems concurrently

Does the environment in which ICT-based market information services (MIS) projects operate affect their performance? Experiences from Kenya

The need to provide agricultural information to farmers has led to emergence of numerous ICTbased MIS projects in developing country. These projects aim at promoting commercialization of smallholder agriculture and subsequently their welfare. This study examines the how the environment in which such ICT-based MIS affect their performance. It specifically uses the DrumNet project, an ICT-based MIS, to assess how the socio-economic, physical, political and physical environment in the project areas affected its performance. The study finds that those transaction-related problems, especially strategic default, deriving from these environmental factors greatly undermined the performance of DrumNet forcing it to relocate severally. It discusses policy implications of these findings

eAgriculture research network : effectiveness of ICT-based interventions in linking African farmers to markets; technical report

Poor access to market information is an important impediment to the commercialization of smallholder agriculture in Africa. Yet, progress in agriculture is content upon farmer access to efficient input and output markets. Attempts to improve smallholder farmer access to efficient markets have recently shifted to the use of ICT-based interventions. A scoping study commissioned by IDRC found widespread use of ICT-based applications in agriculture. As a follow-up of IDRC study, the proposed study aimed at developing a research proposal that would systematically analyze the existing ICT-based interventions to determine what works and what does not in the context of smallholder agriculture..

Investigating the Role of Poultry in Livelihoods and the Impact of HPAI on Livelihoods Outcomes in Africa: Evidence from Ethiopia, Ghana, Kenya and Nigeria

In this paper we investigate the role of poultry in the livelihoods portfolios of households and the impact of supply and demand shocks that may be caused by Highly Pathogenic Avian Influenza (HPAI) on various livelihoods outcomes of households in four Sub-Saharan African (SSA) countries. The study countries include Ethiopia and Kenya in East Africa and Ghana and Nigeria in West Africa. These countries represent a spectrum of SSA countries in terms of disease status, role of poultry sector and means of disease spread. By using nationally representative household level secondary data and discrete choice methods (probit model and zero inflated negative binomial model) we profile the household, farm and regional characteristics of those households who are most likely to keep poultry, and those who are most likely to be engaged in intensive poultry production, i.e., keep larger household flocks. We estimate the impact of the disease outbreaks and scares/threats on livelihood outcomes by using matching methods (i.e., propensity score matching). The results of this study generate valuable information regarding the role of poultry in the livelihoods of small-scale poultry producing households and the livelihood impacts of HPAI induced demand and supply shocks. Such information is critical for the design of targeted and hence efficient and effective HPAI control and mitigation policies