Climate Variability, Risk Coping and Agrarian Policies in Sub-Saharan Africa

Abstract

In this chapter we use a bio-economic model to assess the influence of market and structural policies on farm household resource allocation in different rainfall conditions. We present the simulated effects on income level, soil nutrient balances, food security and labour use for three types of households with different farm resource endowment. The model simulates production and consumption decisions taking into account weather conditions, off-farm employment opportunities, market functioning, risk motives and saving and investment behaviour. The results show that a changing frequency of dry years hardly affects farm income because major decisions are based on dry-year conditions. Output price policies particularly enhance the income of the more wealthy households but have a negative effect on soil nutrient balances. Input price subsidies bring about a more sustainable land use. Structural policies that reduce transaction costs generate the largest income improvements while, particularly during dry years, poor farmers benefit relatively more than wealthy farmers. Market reform programmes therefore continue to be a relevant instrument for reducing poverty and enhancing food security.