Shock interactions, coping strategy choices and household food security

ABSTRACT

Agriculture-based livelihoods in developing countries are often challenged by a multitude of unforeseeable shocks, but economic research mostly focuses on single shocks. This paper investigates how climate, health, pest and price shocks individually and in combination relate to farm households’ coping strategy choices. First, we use binary probit models to examine how interactions from coinciding shocks relate to coping strategy choices. Next, we assess how coping strategies relate to household food security in a recursive framework. We find that when shocks are considered individually, the nature of shocks and their duration affect the likelihood of using savings. However, when climate shocks interact with health, pest or price shocks, there are incremental effects that increase the probability of depleting household assets to cope. Our findings suggest that governmental and non-governmental organizations should support rural farm households in managing the effects of multiple shocks through the provision and enhancement of markets for labour, insurance and outputs as well as formal safety nets. This support will help them to protect their assets and foster long-term wealth creation for escaping chronic poverty and food insecurity.

KEYWORDS:

• Asset depletion
• food security
• incremental effects
• shock interactions
• Ghana

Acknowledgements

The authors are grateful to two anonymous reviewers for suggestions which improved an earlier version of this manuscript. Isaac Gershon Kodwo Ansah is grateful to Wageningen Graduate School (WGS) for financing his PhD studies. We also duly acknowledge the International Food Policy Research Institute (IFPRI) and the International Institute of Tropical Agriculture (IITA) for making the data of the Africa RISING project publicly available for academic research.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Correction Statement

This article has been republished with minor changes. These changes do not impact the academic content of the article.

Notes

1 If the percentage increase in output prices equals the reciprocal value of the percentage decrease in output quantity, the revenue generated from the household’s marketed surplus remains unaffected. If the price increase exceeds the quantity decrease, the household revenue will increase.

2 In the data there is no information on ex ante coping strategies. However, these are partly reflected in some of the control variables, e.g. accumulated assets or savings.

3 We also estimate model (1) using the actual number of shocks reported by households in the original data. We find that the parameters have the same signs and statistical significance as the shock categories, except for asset depletion and labour deployment.

4 Joint estimation is done using Roodman’s (2011) conditional mixed process (cmp) program in Stata.

Additional information

Funding

This work was supported by the Wageningen UR [grant number: 8415255510].

Notes on contributors

Isaac Gershon Kodwo Ansah

Isaac Gershon Kodwo Ansah is a lecturer at the Department of Agricultural and Resource Economics, University for Development Studies. He holds a master degree from Wageningen University and Research (Netherlands), and is currently studying for his PhD in the same institution. Isaac worked as a research assistant and intern, respectively, with Crops Research Institute and Forestry Research Institute of Ghana, prior to his position as a lecturer in the university. His research interests involve agricultural and applied economics, and econometric studies that have agricultural and food policy implications. Specifically, Isaac’s interest borders on the nexus among shocks, coping/adaptation responses, resilience and food security in developing countries.

Cornelis Gardebroek

Cornelis Gardebroek is an associate professor in the Agricultural Economics and Rural Policy group at Wageningen University, The Netherlands. He received his PhD in Agricultural Economics at Wageningen University in 2001. His research and teaching focus on applied econometric analysis of agricultural and rural problems. He has published on issues related to risk and uncertainty, adoption of innovations, microfinance, and agricultural markets.

Rico Ihle

Rico Ihle is assistant professor at the Agricultural Economics and Rural Policy group of Wageningen University, The Netherlands. He holds a PhD in agricultural economics from Georg-August-Universität Göttingen, Germany. His research interests include the analysis of agricultural prices, economic aspects of violent political conflict, the evaluation of the effects of public policies on food and the analysis of food markets in the Middle East and Sub-Saharan Africa.