Gone with the Wind: Productive Response to Agricultural Shock

Authors: Myriam Marending and Stefano Tripodi

Abstract: This paper identifies how farmers’ response to a weather-induced shock plays out in the medium term. The identification relies on counterfactual shock simulations to purge estimates of systematic geographic variation in exposure. Using microdata from Ethiopian farmers, we find a substantial decrease in farm profits, driven by changes in crop mix and an increase in household labour input. A producer-consumer approach shows that the farmers’ response is not productivity-neutral in the medium term, rather partial and total agricultural productivity significantly decrease underscoring farm households’ vulnerability in light of climate extremes. The productive adaptations exacerbate profit loss over time, yet are consistent with subsistence farmers facing incomplete markets in the short term. Control measures are a cost-effective way to reduce profit losses. [SSRN Working paper]

HOUSEHOLDS' EXPECTED PLANT PEST EXPOSURE

This figure shows the location of the Ethiopian Socio Economic Survey enumeration areas. This figure shows the geographical distribution of treated (triangle) and control (circle) enumeration areas of the Ethiopian Socio Economic Survey in 2014. The treatment is assigned using the NOAA-HYSPLIT model to calculate three days flight routes, exploiting the passive flier of the insects. This allows to simulate counterfactual shock assignments using historical climatic and environmental data holding fixed the geography that governs the shock exposure. The figure illustrates that differential geography causes systematically different expected locust exposures across locations. We address this potential source of bias by controlling for expected exposure to desert locust in our regressions.