Adaptation of farm-households to increasing climate variability in Ethiopia: Bioeconomic modeling of innovation diffusion and policy interventions

Publication Type

Contribution to conference

Authors

Berger, T., Assfaw, T., Troost, C., Latynskiy, E., Tesfaye, K., Gbegbelegbe, S.

Year of publication

2015

Conference name

29th International Conference of Agricultural Economists

Conference location

Milan, Italy

Conference date

August 8-14, 2015

Keywords

sustainability

Climate variability with unexpected droughts and floods causes serious production losses and worsens food security, especially in Sub-Saharan Africa. This paper applies stochastic modeling to analyze smallholder adaptation to climate and price variability in Ethiopia. It uses an agent-based simulation package to capture non-separable production and consumption decisions at household level, considering livestock and eucalyptus for consumption smoothing as well as farmer response to policy interventions. We find the promotion of new maize and wheat varieties to be the most effective adaptation option, especially when accompanied by policy interventions such as credit and fertilizer subsidy. We also find that the effectiveness of available adaptation options is quite different across the heterogeneous smallholder population in Ethiopia. This implies that policy assessments based on average farm households may mislead policymakers to adhere to interventions which are beneficial on average albeit ineffective in addressing the particular needs of poor and food insecure farmers.