Social networks andex postrisk management among smallholder farmers in Kenya

Abstract

Smallholder farmers in developing countries are vulnerable to idiosyncratic and covariate risks. The risks affect their welfare through the shocks they impose on income, assets, health and food supply. To cope with these shocks, smallholder farmers have extensively relied on informal risk management strategies such as social networks, due to the poorly developed or missing formal insurance markets. Social networks play a risk-sharing role through transfers (loans and gifts) within the networks. This paper evaluates the factors influencing the formation of financial and non-financial networks as informal insurance strategies, using cross-sectional data collected from 815 households in Kenya and analysed using a dyadic linear probability model. Results show that kinship, geographical proximity, education and age are important determinants of both financial and non-financial links. Health shock is also correlated with the formation of financial links. The findings suggest that financial links play a risk-sharing role when farmers are faced with health shocks. The paper concludes that financial networks act as insurance against idiosyncratic health shocks.

Relationships between mental health and diet during pregnancy and birth outcomes in a lower‐middle income country: “Healthy mothers, healthy communities” study in Vanuatu

“…For example, a large body of literature shows that better social support is a strong predictor of maternal mental health and well‐being (Balaji, Claussen, Smith, Visser, Morales, & Perou, 2007). Similarly, research from LMICs shows that strong social connectedness and support have been associated with more diverse diets (Mbugua, Nzuma, Muange, Njuguna, & Jaeckering, 2018) and better food security (Lee, Surkan, Zelner, Paredes Olórtegui, Peñataro Yori, Ambikapathi, Caulfield, Gilman, & Kosek, 2018), likely driven by both shared resources and shared nutritional knowledge. In concert, social support is a strong direct and independent predictor of larger birthweight (Feldman, Dunkel‐Schetter, Sandman, & Wadhwa, 2000), and might indirectly affect birth outcomes through factors such as utilization of prenatal care.…”

Smallholder Farmers’ Formal Risk Management Services: Evidence from Southeast Nigeria

“…As a decision-making tool, it involves choosing among alternatives that attenuate the downside effects resulting from risks. Farmers including smallholder farmers can adopt strategies to manage risk before the occurrence of the potentially harmful event (ex-ante) or after the likely adverse event has occurred (ex-post) (Harwood et al, 1999;Ahaneku et al, 2019;Mbugua et al, 2019). Risk management can be either informal or formal.…”