Access to markets, weather risk, and livestock production decisions: Evidence from Ethiopa
This study (PDF) in Agricultural Economics examined whether and how livestock production responds to (access to) markets and varying weather risk and explores whether such responses vary across livelihood zones and livestock production systems. Quite little is known on whether and how livestock production systems respons to variation in weather risk and access to markets. To study this, households’ livestock production, ownership and marketing decisions of households in Ethiopia are used. Results show that households living close to markets are more likely to engage in market‐oriented livestock production and use modern livestock inputs. It is also found 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 towards 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 (ASAL) 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.