Global Livestock CRSP Pastoral Risk Management (PARIMA) Project

Global Livestock CRSP Pastoral Risk Management (PARIMA) Project

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 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. 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 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 Global Livestock CRSP Pastoral Risk Management (PARIMA) Project Site Selection in Kenya Code

Name Market Access Ethnic Majority Annual Rainfall DG Dirib Gumbo Medium Boran 650 KA Kargi Low Rendille 200 LL Logologo Medium Ariaal 250 NG Ngambo High

Il Chamus 650 NH North Horr Low Gabra 150 SM Sugata Marmar High Samburu 500 Global Livestock CRSP Pastoral Risk Management (PARIMA) Project Site Selection in Ethiopia Code Name Market Access Ethnic Majority DH Dida Hara Medium Boran DI

Dillo Low Boran FI Finchawa High Guji QO Qorate Low Boran WA Wachille Medium Boran Annual Rainfall Global Livestock CRSP Pastoral Risk Management (PARIMA) Project We originally began our research effort by identifying the following risks 1) Climate 2) Market 3) Insecurity 4) Animal and human disease 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 Global Livestock CRSP Pastoral Risk Management (PARIMA) Project Herd Accumulation Original Hypothesis Herders traditionally self-insure through herd accumulation. Global Livestock CRSP Pastoral Risk Management (PARIMA) Project Herd Accumulation Research Methods 1) Repeated surveys 2) Oral histories of individual recovery patterns (species sequencing, use of market purchases, transfers, ) Global Livestock CRSP Pastoral Risk Management (PARIMA) Project Herd Accumulation Preliminary Findings Best predictor of post-drought herd size is predrought herd size and recovery is faster when you start bigger accumulation is costly but effective insurance Herd Size in June compared to December Ethiopia Herd size in June compared to December - Kenya 7 6 Log (De ce m be r TLU + 1) log(December TLU +1) 7 5 4 3 2 1 0 0

1 2 3 4 log(June TLU +1) 5 6 7 6 5 4 3 2 1 0 0 1 2 3 4 Log (June TLU +1) 5 6 7 Global Livestock CRSP Pastoral Risk Management (PARIMA) Project Herd Accumulation Preliminary Findings Kenyan median herd size Ethiopian median herd size

30 30 dh dg 25 20 ka 20 di 15 ll 15 fi 10 ng 10 5 nh 5 0 sm 0 25 baseline

krh0600 krh0900 krh1200 qo wa baseline 0600 0900 1200 Global Livestock CRSP Pastoral Risk Management (PARIMA) Project Herd Accumulation What Lies Ahead 1) Analysis of herd rebuilding and poverty dynamics: who recovers fast and how? Who gets trapped and why? 2) Use of species diversification and sequencing in herd rebuilding. 3) Intrahousehold variation: who loses the animals and who gets restocked quickly? 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 Global Livestock CRSP Pastoral Risk Management (PARIMA) Project MOBILITY-Research Methods 1) Repeated Surveys 2) Baseline survey on past water point use and access restrictions 3) Case studies on resource tenure and resource conflicts

Global Livestock CRSP Pastoral Risk Management (PARIMA) Project MOBILITY-preliminary findings 1) Mobility is primary means to maintain herd size (Little and Mahmoud, 2000; Little et al. in press; Kenya Survey) Species Diversity* Water Point Use % Remote Camp Median Herd Size Change DG Low 4 41% -80% KA High 9 87% 9% LL Medium 7 86% -55% NG

Medium 4 8% -65% NH High 5 50% -19% SM Medium 4 30% -49% * As measured by a squared TLU share index Measured in Tropical Livestock Units (1 head of cattle = 0.7 Camel=10 sheep=11 goats) Global Livestock CRSP Pastoral Risk Management (PARIMA) Project MOBILITY-preliminary findings Ethiopia Data Site Species Diversity Water Point Use Remote Camp % Median Herd

Change DH Medium 4 12% -25% DI Medium 4 25% -86% FI Low 4 6% 8% QO High 3 0% 15% WA Medium 3

1% -38% * As measured by a squared TLU share index Measured in Tropical Livestock Units (1 head of cattle = 0.7 Camel=10 sheep=11 goats) Global Livestock CRSP Pastoral Risk Management (PARIMA) Project 2) 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 Global Livestock CRSP Pastoral Risk Management (PARIMA) Project Mobility What lies ahead 1) Geo-referenced mobility patterns to examine how distance and herd size influence mobility 2) Analyzing data recording access rights to key resources 3) Case studies of changing resource access 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. Global Livestock CRSP Pastoral Risk Management (PARIMA) Project Marketing- Research Methods 1) Repeated Surveys. 2) Study of livestock trade and trader networks. 3) Analysis of GTZ livestock market data. 4) Study of livestock marketing institutions. 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 . Estimated Effects of Drought On Livestock Prices (hypothetical drop of 200 and 300 millimeters over 3 and 12 months, respectively)

Percent Change Camels Cattle Goats Sheep Males Females Marsabit -3.1 -4.6 Moyale -8.1 -11.9 Marsabit -22.1 -52.3 Moyale -33.4 -47.5 Marsabit -14.6 -17.4 Moyale -12.2 -16.3

Marsabit -21.3 -34.1 Source: Barrett, Chabari, Bailey, Coppock and Little (2001) Global Livestock CRSP Pastoral Risk Management (PARIMA) Project Marketing-Preliminary findings Quarantines affect cattle prices, creating a distributionally regressive means of livestock disease control. Estimated Effects of Quarantine On Livestock Prices Percent Change Camels Cattle Goats Sheep Males Females Marsabit -9.1 -6.4 Moyale -6.2 -3.7 Nairobi 0.2 0.1 Marsabit

-23.7 -12.2 Moyale -16.1 -7.4 Nairobi 2.4 2.2 Marsabit -2.1 -2.4 Moyale -1.1 -1.0 Nairobi 0.4 -0.1 Marsabit -5.9 -2.7 Nairobi 0.2 0.1 Source: Barrett, Chabari,

Bailey, Coppock and Little (2001) 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. 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. Global Livestock CRSP Pastoral Risk Management (PARIMA) Project Finchaw a Dida Hara Dillo 40% MarketingPreliminary findings 40% 30% 30% 30% 20% 20% 20% 40% 10%

0600 0% 0900 -10% br-dr sales purchases 1200 sales purchases 10% 0900 0% 1200 -10% -20% 0600 0900 br-dr Death -30% rate, Sales rate, purchase rate -30% -30% -40% -40% 40% 30% 20%

10% br-dr sales -40% By site, by period Wachille Qorati -30% -40% 0% with Table br-dr -10% 0600 -20% -20% 0% -10% -20% 10% purchases 40% 30% 20% 0600 10% 0% 0900 -10% 1200 -20% -30% -40% 0600 0900

br-dr sales purchases 1200 sales purchases 1200 Global Livestock CRSP Pastoral Risk Management (PARIMA) Project Kargi Logologo 40% Marketing- Preliminary findings 30% 20% 10% 0% -10% North Horr br - dr sale purchase 40% 40% 30% 30% 20%

20% 0600 10% 0600 10% 0900 0% 0900 0% 1200 -10% br - dr sale purchase 1200 -10% -20% -20% -20% -30% -30% -30% -40% -40%

-40% Ngam bo 40% 30% 30% 30% 20% 20% 20% 10% 0600 0% -10% 0900 purchase 1200 10% 0600 0% -10% 0900 br - dr sale purchase sale purchase

1200 Dirib Gum bo 40% sale 0900 br - dr Sugata Marm ar 40% br - dr 0600 1200 10% 0600 0% -10% -20% -20% -20% -30% -30% -30% -40% -40% -40% 0900 br - dr

sale purchase 1200 Global Livestock CRSP Pastoral Risk Management (PARIMA) Project Annualized Sales Rates are High, and correspond to Market Access Annualized Sales Rate 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% QO KA NH LL WA DG DI SM NG DH FI Global Livestock CRSP Pastoral Risk Management (PARIMA) Project Marketing- What lies ahead

1) Effects of conflict on livestock marketing. 2) Analysis of nature and effects of market power. 3) Differences in incentives to pastoralists between auctions and dyadic markets. 4) Analysis of the determinants of the pastoral marketing behavior. 5) Potential synergies between savings institutions and livestock marketing. 6) The influence of intra-household rights to animals on 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. Global Livestock CRSP Pastoral Risk Management (PARIMA) Project Financial Savings-Research Methods 1) Repeated Surveys 2) Interviews with FSA members, non-members, and management. 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 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. Percent having accounts of different values Percent having a bank account or money in a FSA 10% 100% 90% 80% 70%

60% 50% 40% 30% 20% 10% 0% up to $100 $100 to $250 $250 to $500 8% base 0600 0900 1200 6% 4% 2% dg ka ll ng nh sm 0% 600 900 1200 Global Livestock CRSP Pastoral Risk Management (PARIMA) Project Financial Savings What lies ahead 1) Relationship between household wealth and savings and credit behavior 2) Analysis of institutional design

3) Exploration of link between formal finance and income and asset diversification. 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. Global Livestock CRSP Pastoral Risk Management (PARIMA) Project Social Support Networks Research Methods 1) Repeated surveys 2) Focused survey and open-ended interviews on intra-household property rights and transfers 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) 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 100% 213 80% Gave More Than Received None 233 60% 88 40%

20% -996 -371 -285 -50 0% DH DI FI 84 217 QO WA Received More Than Gave Global Livestock CRSP Pastoral Risk Management (PARIMA) Project Number above is in shillings over 9 month period Net Cash Transfers: Kenya 100% 2270 80% 229 761 1071 2569 4107 60%

-964 40% 20% -1571 -203 -870 -1262 -2216 0% DG KA LL NG NH SM Gave More Than Received None Received More Than Gave Global Livestock CRSP Pastoral Risk Management (PARIMA) Project Social Support Networks What Lies Ahead 1) Analysis of the role of inter-household livestock transfers in drought recovery. 2) Oral histories of changing support mechanisms. 3) Explore relationship between nonpastoral income and cash transfers, food security and restocking. 4) What is the role of interhousehold food transfers in enhancing food security. 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. Global Livestock CRSP Pastoral Risk Management (PARIMA) Project Activity Diversification Research Methods 1) Repeated surveys 2) Focus group interviews 3) Interviews with entrepreneurs Global Livestock CRSP Pastoral Risk Management (PARIMA) Project Activity Diversification Preliminary Findings 1) Much activity diversification has been ex post coping among the poor (push not pull). (Little et al. 2001). 2) Those with education and/or good market access enjoy ex ante diversification yielding higher incomes. 3) Women have different and worse opportunities. 4) Salaries have a stabilizing effect. Global Livestock CRSP Pastoral Risk Management (PARIMA) Project Dillo Finchaw a Dida Hara 450 450 450 400 400 400 350 350 350 liv sale

300 trade 250 salary 200 w age 150 other sales liv sale 300 trade 250 salary 200 w age 150 other sales 50 50 50 0600 Qorati 0900 0600 1200

Wachille 450 450 400 400 350 350 liv sale 300 trade 250 salary 200 w age 150 other sales trade 250 salary 200 w age 150 100 50 50

0 liv sale 300 100 other sales 0 0600 0900 1200 other sales 0 0 1200 w age 150 100 0900 salary 200 100 0600 trade 250 100 0

liv sale 300 0600 0900 1200 0900 1200 Global Livestock CRSP Pastoral Risk Management (PARIMA) Project Dillo Dida Hara 200 meat 180 beads 160 clothes o 140 clothes s 120 tob 100 veggies 80 beans

60 fat 40 tea 20 sugar 0 0600 0900 1200 grain 200 180 160 140 120 200 beads 180 clothes o 160 clothes s 140 100 veggies 80 beans

60 fat 40 tea 20 sugar 0 0600 0900 1200 grain Wachille 200 meat 180 beads 160 clothes o 140 clothes s 120 tob 100 veggies

80 beans 60 fat 40 tea 20 sugar 0 0900 meat tob Qorate 0600 Finchaw a 1200 grain 200 meat 180 beads 160 clothes o 140 clothes s

120 tob 100 veggies 80 beans 60 fat 40 tea 20 sugar 0 0600 0900 1200 grain meat beads clothes o clothes s 120 tob 100 veggies 80

beans 60 fat 40 tea 20 sugar 0 0600 0900 1200 grain Global Livestock CRSP Pastoral Risk Management (PARIMA) Project Dirib Gumbo Kargi Logologo liv sales Activity Diversification Preliminary Findings liv sales 14000 trade 12000 salary 10000 w age other sales

8000 liv sales 14000 trade 12000 salary 10000 w age other sales 8000 14000 trade 12000 salary 6000 6000 4000 4000 4000 2000 2000 2000 0 0 0600

0900 1200 0600 liv sales trade 12000 salary 10000 w age other sales 8000 0900 0600 1200 North Horr Ngambo 14000 liv sales 14000 trade 12000 salary 10000 w age other sales 8000

trade 12000 salary 10000 w age other sales 8000 6000 4000 4000 4000 2000 2000 2000 0 0 1200 1200 liv sales 14000 6000 0900 0900 Sugata Marm ar 6000

0600 other sales 8000 6000 0 w age 10000 0 0600 0900 1200 0600 0900 1200 Global Livestock CRSP Pastoral Risk Management (PARIMA) Project Dirib Gum bo 2000 Kargi meat/milk Logologo 2000 meat/milk beads tobacco 1500 clothes oth

veggies tobacco 1500 fat clothes oth 1000 veggies sugar 0600 0900 1200 grain fat 500 clothes oth 1000 veggies beans fat 500 sugar 0 0600 0900 1200 grain

tea sugar 0 0600 meat/milk 2000 meat/milk beads tobacco 1500 clothes oth veggies 500 0 tobacco 1500 1200 2000 clothes oth 1000 veggies beans fat fat 500 tea tea

sugar sugar 0 0600 0900 grain meat/milk beads tobacco 1500 clothes s beans grain 1200 beads clothes s 1000 0900 Sugata Marm ar North Horr 2000 0900 clothes s tea Ng'am bo 0600

tobacco 1500 beans tea 0 beads clothes s beans 500 meat/milk beads clothes s 1000 2000 1200 grain clothes s clothes oth 1000 veggies beans 500 fat tea sugar 0 0600 0900

1200 grain Global Livestock CRSP Pastoral Risk Management (PARIMA) Project Activity Diversification What Lies Ahead 1) Osterloh thesis research on the potential of nonpastoral activities to support households and financial systems. 2) Identification of which types of diversification increase risk exposure and reduce welfare and which types mitigate risk and improve welfare. 3) Role of activity diversification in assisting drought recovery. 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. Global Livestock CRSP Pastoral Risk Management (PARIMA) Project External Assistance: Research Methods 1) Repeated survey 2) Action research 3) Extensive review of secondary literature 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 Global Livestock CRSP Pastoral Risk Management (PARIMA) Project Veterinary Services Education External Assistance: Preliminary Findings 100%

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% GOVT PRIVATE MISSION NGO dg ka ll ng nh GOVT 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% sm PRIVATE MISSION NGO dg

ka Medical Services GOVT 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Kenya PRIVATE MISSION NGO dg ka ll ng nh sm ll ng nh sm Global Livestock CRSP Pastoral Risk Management (PARIMA) Project Veterinary 100%

90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Education External Assistance: Preliminary Findings 100% government private mission ngo DH DI FI QO WA 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% governmen private mission ngo DH

DI Medical Ethiopia 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% government private mission ngo DH DI FI QO WA FI QO WA Global Livestock CRSP Pastoral Risk Management (PARIMA) Project External Assistance: Preliminary Findings Food Aid - Kenya Food Aid - Ethiopia 100% 90%

80% 70% 60% 50% 40% 30% 20% 10% 0% 0600 0900 1200 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 0600 0900 1200 dg DH DI FI QO WA ka ll ng

nh sm Global Livestock CRSP Pastoral Risk Management (PARIMA) Project External Assistance: Preliminary Findings Grain Food Aid - Kenya Grain Food Aid - Ethiopia 350 350 300 300 DH 250 DI 200 FI 150 100 50 dg 250 ka 200 QO 150 WA 100

ll ng nh sm 50 0 0600 0900 1200 0 0600 0900 1200 Global Livestock CRSP Pastoral Risk Management (PARIMA) Project Dida Hara Finchaw a Dillo 300 300 300 250 250 250 200 food aid val 150 milk val

cash exp 100 50 200 food aid val 150 milk val cash exp 100 0900 1200 0600 Qorate 0900 300 250 250 200 food aid val 150 milk val cash exp 100 50 200 food aid val

150 milk val cash exp 100 50 0 0 0600 0900 1200 milk val cash exp 100 0600 1200 Wachille 300 150 0 0 0600 food aid val 50 50 0 200 0600

0900 1200 0900 1200 Consumption by site and period Dirib Gumbo Kargi Logologo 3000 3000 3000 2500 2500 2500 2000 food aid val 1500 milk val cash exp 1000 500 2000 food aid val 1500 milk val cash exp

1000 500 0 0900 1200 food aid val 1500 milk val cash exp 1000 500 0 0600 2000 0 0600 0900 1200 0600 North Horr Ng'am bo 3000 3000 2500 2500 2500 f ood aid val

1500 milk val cash exp 1000 2000 food aid val 1500 milk val cash exp 1000 1200 Sugata Marmar 3000 2000 0900 2000 food aid val 1500 milk val cash exp 1000 500 500 500 0 0600

0900 1200 0 0 0600 0900 1200 0600 0900 1200 Global Livestock CRSP Pastoral Risk Management (PARIMA) Project External Assistance: What Lies Ahead 1) Analysis of whether interhousehold transfers get food to people who need it most, in spite of the fact that food aid is equally distributed. 2) Analysis of environmental implications of food aid form (fuelwood and grazing). Global Livestock CRSP Pastoral Risk Management (PARIMA) Project Preliminary Findings: The Highlights 1) Not always in the same boat: risk is idiosyncratic 2) Some pastoralists indeed use markets aggressively in response to drought. 3) Income diversification widespread in Kenya, but not all forms are equally helpful 4) Mobility, herd accumulation and salaried income are effective risk management strategies. 5) Use of financial institutions and social support networks is minimal 6) Few households depend on food aid Global Livestock CRSP Pastoral Risk Management (PARIMA) Project Practical Implications What can be done to improve pastoral risk management? Essential short-run principle:

Support, dont 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 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

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