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Global Livestock CRSP Pastoral Risk Management (PARIMA) Project . PROBLEM STATEMENT Pastoralists are exposed to many and increasing risks. Local systems are under stress and increasingly unstable. Pastoralist welfare is declining. Global Livestock CRSP

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slide1

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

PROBLEM STATEMENT

Pastoralists are exposed to many and increasing risks.

Local systems are under stress and increasingly unstable.

Pastoralist welfare is declining.

slide2

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Central Project Hypothesis:

Improved capacity to mitigate risk and uncertainty at individual, household, community, and regional levels will improve the well-being of pastoral peoples and the quality of the natural and social environments on which they depend.

slide3

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

RESEARCH DESIGN

Interdisciplinary.

A mix of quantitative and qualitative approaches: quarterly surveys, case studies, and others.

Multiple scales: Individual, Household, Community, National

Temporal and cross-sectional comparisons

Recording behaviors as well as perceptions

slide4

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Site Selection

  • 11 sites in the study region selected to represent variation in:
  • Country
  • Market Access
  • Ethnicity
  • Agro-ecology
slide5

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Site Selection in Kenya

slide6

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Site Selection in Ethiopia

slide7

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

  • We originally began our research effort by identifying the following risks
  • Climate
  • Market
  • Insecurity
  • Animal and human disease
slide8

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Strategies to Reduce Risk Exposure

Herd Accumulation

Mobility

Marketing

Financial Savings

Social Insurance

Activity Diversification

External Assistance

slide9

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Herd Accumulation – Original Hypothesis

Herders traditionally self-insure through herd accumulation.

slide10

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Herd Accumulation – Research Methods

  • Repeated surveys
  • Oral histories of individual recovery patterns (species sequencing, use of market purchases, transfers, …)
slide11

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Herd Accumulation – Preliminary Findings

Best predictor of post-drought herd size is pre-drought herd size and recovery is faster when you start bigger… accumulation is costly but effective insurance

slide12

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Herd Accumulation – Preliminary Findings

slide13

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Herd Accumulation – What Lies Ahead

  • Analysis of herd rebuilding and poverty dynamics: who recovers fast and how? Who gets trapped and why?
  • Use of species diversification and sequencing in herd rebuilding.
  • Intrahousehold variation: who loses the animals and who gets restocked quickly?
slide14

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

MOBILITY-Initial Hypothesis

Primary traditional means of coping with spatial and temporal variability in forage and water availability

Increasingly impeded by

- cultivation of key terrain

- violence and instability

- growth of towns

- gazetting of protected areas

- localized range degradation

slide15

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

MOBILITY-Research Methods

  • Repeated Surveys
  • Baseline survey on past water point use and access restrictions
  • Case studies on resource tenure and resource conflicts
slide16

% Remote Camp

Median Herd Size Change†

Species Diversity*

Water Point Use

41%

-80%

DG

Low

4

87%

9%

KA

High

9

86%

-55%

LL

Medium

7

8%

-65%

NG

Medium

4

50%

-19%

NH

High

5

30%

-49%

SM

Medium

4

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

MOBILITY-preliminary findings

  • Mobility is primary means to maintain herd size (Little and Mahmoud, 2000; Little et al. in press; Kenya Survey)

* As measured by a squared TLU share index

†Measured in Tropical Livestock Units (1 head of cattle = 0.7 Camel=10 sheep=11 goats)

slide17

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

MOBILITY-preliminary findings

Ethiopia Data

* As measured by a squared TLU share index

†Measured in Tropical Livestock Units (1 head of cattle = 0.7 Camel=10 sheep=11 goats)

slide18

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

  • Household level herd size differences influence mobility; larger herds are more mobile. (Little, in press; McPeak, in press; McPeak and Barrett, in press)
    • This can help explain observed localized degradation
    • This can lead to poverty traps
slide19

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Mobility – What lies ahead

  • Geo-referenced mobility patterns to examine how distance and herd size influence mobility
  • Analyzing data recording access rights to key resources
  • Case studies of changing resource access
slide20

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Marketing- Initial Hypothesis

Little use of livestock markets in response to shocks.

Trader networks facilitate trade and reduce transaction costs.

Poor market integration leads to low and volatile producer prices.

slide21

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Marketing- Research Methods

  • Repeated Surveys.
  • Study of livestock trade and trader networks.
  • Analysis of GTZ livestock market data.
  • Study of livestock marketing institutions.
slide22

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Marketing-preliminary findings

Livestock prices covary positively with rainfall, so prices collapse when pastoralists most need to sell .

slide23

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Marketing-Preliminary findings

Quarantines affect cattle prices, creating a distributionally regressive means of livestock disease control.

Source:

Barrett, Chabari, Bailey, Coppock and Little (2001)

slide24

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Marketing-Preliminary findings

Livestock price volatility in northern Kenya is due primarily to variability in the difference between the local producer price and the Nairobi market price.

slide25

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Marketing-Preliminary findings

Different groups of traders, characterized by scale and ethnicity, have preferential access to different markets.

slide26

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Marketing- Preliminary findings

Table with

Death rate, Sales rate, purchase rate

By site, by period

slide27

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Marketing- Preliminary findings

slide28

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Annualized Sales Rates are High, and correspond to Market Access

slide29

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Marketing- What lies ahead

  • Effects of conflict on livestock marketing.
  • Analysis of nature and effects of market power.
  • Differences in incentives to pastoralists between auctions and dyadic markets.
  • Analysis of the determinants of the pastoral marketing behavior.
  • Potential synergies between savings institutions and livestock marketing.
  • The influence of intra-household rights to animals on marketing behavior.
slide30

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Financial Savings- Research Hypotheses

There is latent demand for financial savings.

Conversion of pastoral wealth through financial savings will improve pastoral welfare by reducing risk of asset loss.

Savings will lead to asset and income diversification.

slide31

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Financial Savings-Research Methods

  • Repeated Surveys
  • Interviews with FSA members, non-members, and management.
slide32

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Financial Savings-Preliminary findings

Sharon Osterloh will present findings from her survey of micro-finance institutions in northern Kenya.

Hussein Mahmoud will mention use of savings accounts by traders

slide33

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Financial Savings-Preliminary findings

Kenya results below. In Ethiopia, only 2 sample households had accounts when we started, none do now.

slide34

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Financial Savings – What lies ahead

  • Relationship between household wealth and savings and credit behavior
  • Analysis of institutional design
  • Exploration of link between formal finance and income and asset diversification.
slide35

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Social Support Networks – Original Hypothesis

Customary transfers between households of cash, food, and livestock help households and individuals cope with risk.

Access to these networks varies across and within households.

slide36

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Social Support Networks – Research Methods

  • Repeated surveys
  • Focused survey and open-ended interviews on intra-household property rights and transfers
slide37

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Social Support Networks – Preliminary Findings

Survey evidence from the Kenyan Gabra and Ethiopian Boran show livestock transfers are quantitatively very small. Livestock transfers depend on past transfer history. (McPeak 2001; Lybbert et al. 2001)

slide38

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Social Support Networks – Preliminary Findings

Net cash transfers - Ethiopia

Number indicates mean amount in birr over 9 month period

213

233

88

-371

84

-996

217

-285

-50

slide39

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Net Cash Transfers: Kenya

Number above is in shillings over 9 month period

2270

761

2569

229

1071

4107

-964

-1571

-870

-203

-2216

-1262

slide40

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Social Support Networks – What Lies Ahead

  • Analysis of the role of inter-household livestock transfers in drought recovery.
  • Oral histories of changing support mechanisms.
  • Explore relationship between nonpastoral income and cash transfers, food security and restocking.
  • What is the role of interhousehold food transfers in enhancing food security.
slide41

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Activity Diversification – Original Hypothesis

Asset and income diversification are key ways to improve risk management by pastoralists.

slide42

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Activity Diversification – Research Methods

  • Repeated surveys
  • Focus group interviews
  • Interviews with entrepreneurs
slide43

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Activity Diversification – Preliminary Findings

  • Much activity diversification has been ex post coping among the poor (“push” not “pull”). (Little et al. 2001).
  • Those with education and/or good market access enjoy ex ante diversification yielding higher incomes.
  • Women have different and worse opportunities.
  • Salaries have a stabilizing effect.
slide44

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

slide45

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

slide46

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Activity Diversification – Preliminary Findings

slide47

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

slide48

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Activity Diversification – What Lies Ahead

  • Osterloh thesis research on the potential of nonpastoral activities to support households and financial systems.
  • Identification of which types of diversification increase risk exposure and reduce welfare and which types mitigate risk and improve welfare.
  • Role of activity diversification in assisting drought recovery.
slide49

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

External Assistance: Original Hypothesis

Pastoral populations growing increasingly dependent on disaster relief, yet neglected by service providers. Much previous pastoral development assistance was misdirected.

slide50

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

External Assistance: Research Methods

  • Repeated survey
  • Action research
  • Extensive review of secondary literature
slide51

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

External Assistance: Preliminary Findings

Food aid distribution ubiquitous and doled out in equal shares.

Food aid volumes are modest at best and nonresponsive to need.

Potentially adverse effects on local range conditions (McPeak 2001)

Service providers come from multiple sectors

slide52

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

External Assistance: Preliminary Findings

Kenya

slide53

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

External Assistance: Preliminary Findings

Ethiopia

slide54

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

External Assistance: Preliminary Findings

slide55

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

External Assistance: Preliminary Findings

slide56

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

slide58

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

External Assistance: What Lies Ahead

  • Analysis of whether interhousehold transfers get food to people who need it most, in spite of the fact that food aid is equally distributed.
  • Analysis of environmental implications of food aid form (fuelwood and grazing).
slide59

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Preliminary Findings: The Highlights

  • Not always in the same boat: risk is idiosyncratic
  • Some pastoralists indeed use markets aggressively in response to drought.
  • Income diversification widespread in Kenya, but not all forms are equally helpful
  • Mobility, herd accumulation and salaried income are effective risk management strategies.
  • Use of financial institutions and social support networks is minimal
  • Few households depend on food aid
slide60

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Practical Implications

What can be done to improve pastoral risk management?

Essential short-run principle:

Support, don’t undermine, pastoralists’ preferred means of managing risk: herd accumulation, mobility and marketing

YES: restocking of viable herds, improved security, primary education, strengthen marketing infrastructure and institutions, find better animal disease control measures than quarantines

NO: destocking programs for moderate-sized herds, nonresponsive food aid

slide61

Global Livestock CRSP

Pastoral Risk Management (PARIMA) Project

Practical Implications

What can be done to improve pastoral risk management?

Longer term:

Invest in marketing infrastructure and institutions to reduce price volatility and transactions costs

Develop more effective means of distributing emergency relief

Reevaluate potential for sustainable financial systems once market activity and income opportunities expand

Promote investment in non-pastoral economic activities to widen the range of desirable employment and investment opportunities