Income portfolios in rural Ethiopia and Tanzania: Choices and constraints

Dercon, Stefan; Krishnan, Pramila

doi:10.1080/00220389608422443

Cited by 285 publications

(196 citation statements)

References 10 publications

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“…Similarly, agro-forestry can contribute to both food and sustainability goals through simultaneous production and carbon sequestration. Household agricultural decisions are also often made to reduce or spread risk rather than optimise production, especially in food insecure households where income diversification is common (Dercon and Krishnan 1996). Risk is increased in low-income agricultural households when strategies such as borrowing money, or selling assets and livestock, are used to generate the income needed to purchase inputs seasonally, which results in a debt or loss of capital that is expected to be repaid on harvest.…”

Section: Understanding the Objectives Of Adaptationmentioning

confidence: 99%

Crop modelling: towards locally relevant and climate-informed adaptation

Beveridge

Challinor

2018

Climatic Change

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A gap between the potential and practical realisation of adaptation exists: adaptation strategies need to be both climate-informed and locally relevant to be viable. Place-based approaches study local and contemporary dynamics of the agricultural system, whereas climate impact modelling simulates climate-crop interactions across temporal and spatial scales. Cropclimate modelling and place-based research on adaptation were strategically reviewed and analysed to identify areas of commonality, differences, and potential learning opportunities to enhance the relevance of both disciplines through interdisciplinary approaches. Cropmodelling studies have projected a 7-15% mean yield change with adaptation compared to a non-adaptation baseline (Nature Climate Change 4:1-5, 2014). Of the 17 types of adaptation strategy identified in this study as place-based adaptations occurring within Central America, only five were represented in crop-climate modelling literature, and these were as follows: fertiliser, irrigation, change in planting date, change in cultivar and area cultivated. The breath and agency of real-life adaptation compared to its representation in modelling studies is a source of error in climate impact simulations. Conversely, adaptation research that omits assessment of future climate variability and impact does not enable to provide sustainable adaptation strategies to local communities so risk maladaptation. Integrated and participatory methods can identify and reduce these sources of uncertainty, for example, stakeholder's engagement can identify locally relevant adaptation pathways. We propose a research agenda that uses methodological approaches from both the modelling and place-based approaches to work towards climate-informed locally relevant adaptation.

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Section: Understanding the Objectives Of Adaptationmentioning

confidence: 99%

Crop modelling: towards locally relevant and climate-informed adaptation

Beveridge

Challinor

2018

Climatic Change

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“…Reardon et al 1988, Reardon 1997). Dercon and Krishnan (1996) look explicitly at the role of different constraints to enter into activities in Tanzania and Ethiopia. They find that the poor typically enter into activities with low entry costs: firewood collection, charcoal, collecting dung cakes, casual agricultural wage employment, etc.…”

Section: Income Smoothing Strategiesmentioning

confidence: 99%

Income Risk, Coping Strategies, and Safety Nets

Dercon

2002

The World Bank Research Observer

787

545

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High income risk is part of life in developing countries. Climatic risks, economic fluctuations, but also a large number of individual-specific shocks make these households vulnerable to serious hardship. For example, details are given on the various shocks and events causing serious hardship to rural households in Ethiopia in the last twenty years. Not surprisingly for Ethiopia, climatic events are the most common cause of shocks, but many households suffer from other common or idiosyncratic shocks related to economic policy, labour or livestock.Rural and urban households in developing countries face substantial risk. Households in risky environments have developed sophisticated (ex ante) risk-management and (ex post) risk-coping strategies, including self-insurance via savings and informal insurance mechanisms while formal credit and insurance markets appear to contribute only little to reducing income risk and its consequences. Despite these strategies, vulnerability to poverty linked to risk remains high. In this paper, I focus on the opportunities available to households to use risk-management and risk-coping strategies, and on the constraints on their effectiveness, by reviewing some of the recent literature on savings as insurance, income diversification and smoothing, and informal risk-sharing arrangements. Risk and lumpiness limit the opportunities to use assets as insurance. Entry constraints limit the usefulness of income diversification. Informal risk-sharing only provides limited protection, especially for some of the poor and their sustainability during periods of change is in doubt. Public safety nets are likely to be beneficial, but their impact is at times limited while they may have negative externalities on households not covered by the safety net. The paper also discusses the implications for policy as well as the information requirements to increase our understanding of vulnerability and implement better vulnerability reducing policies.

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“…Ellis (1998) identifies diversification to be an accumulation strategy which is likely to result in improvement in household incomes and assets. However, Whitehead and Kabeer (2001) and Dercon and Krishnan (1996) caution that accumulation through diversification may not be equally available to all rural households. De Janvry and Sadoulet (2001) report forms of accumulation in the rural non-farm service sector such as tourism and wage labour activities, conceding that the rural non-farm service sector has a better potential to enhance accumulation from diversification.…”

Section: Characteristics Of Rural Non-farm Enterprise In Ghanamentioning

confidence: 99%

“…Ellis (1998) supports the finding that diversification can lead to improved income and asset accumulation. Also, Whitehead and Kabeer (2001) and Dercon and Krishnan (1996) contend that non-farm activities may be a source of surplus income which can be invested in productivity-enhancing methods on farms, and other forms of capital or asset accumulation. Using data from Mozambique, Fox and Sohnesen (2016) argue that non-farm enterprises offer a particularly unique opportunity for upward mobility and consumption growth for households with relatively low education levels.…”

Section: Characteristics Of Rural Non-farm Enterprise In Ghanamentioning

confidence: 99%

Non-Farm Enterprises and the Rural Youth Employment Challenge in Ghana

Lambon‐Quayefio

2017

IDS Bulletin

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Non-farm enterprises have generally been perceived as a silver bullet solution for rural unemployment. This article therefore provides some insights on their potential to resolve the youth unemployment challenge in rural Ghana. Non-farm enterprises in Ghana are heterogeneous in nature based on type of enterprise, range of activities and productivity. Evidence suggests that motivations for operating these enterprises are mixed. Some households operate them as a coping mechanism to deal with household or agricultural shocks, while others may also be operated as business entities with the potential to grow sustainably and offer employment to young people. In order to harness the full potential of non-farm enterprises to address the rural youth employment challenge, it is imperative for policymakers in Ghana to identify specific sub-sectors that lend themselves to growth and have the capacity to offer sustainable employment avenues, and to critically interrogate and examine the primary reason of their establishment.

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Income portfolios in rural Ethiopia and Tanzania: Choices and constraints

Cited by 285 publications

References 10 publications

Crop modelling: towards locally relevant and climate-informed adaptation

Crop modelling: towards locally relevant and climate-informed adaptation

Income Risk, Coping Strategies, and Safety Nets

Non-Farm Enterprises and the Rural Youth Employment Challenge in Ghana

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