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Can a Social Safety Net Affect Farmers’ Crop Portfolios? A Study of the Productive Safety Net Programme in Ethiopia

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  • Andersson, Camilla

    ()
    (Department of Economics, Umeå University)

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    Abstract

    In this paper, we examine whether a minimum level of ensured consumption from a social safety net has the potential of breaking the vicious circle of risk avoidance and low return in African agriculture. We study how the implementation of a social safety net programme in Ethiopia has affected the value, risk and composition of farmers’ crop portfolios. The effects of programme participation on the value and risk of the crop portfolio are examined in a Just-Pope production function, and the effects of programme participation on composition of the crop portfolio are tested in a set of acreage response models. The empirical analysis is based on unique household panel data that allow us to control for unobserved heterogeneity. No significant effect on the value and risk of the crop portfolio could be found. However, the programme seems to have brought about some changes in the land allocated to different crops. The greatest effect is towards increased cultivation of perennials, which are high-value, high-risk crops in this part of Ethiopia.

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    Bibliographic Info

    Paper provided by Umeå University, Department of Economics in its series Umeå Economic Studies with number 807.

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    Length: 50 pages
    Date of creation: 19 May 2010
    Date of revision:
    Handle: RePEc:hhs:umnees:0807

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    Postal: Department of Economics, Umeå University, S-901 87 Umeå, Sweden
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    Keywords: Crop choice; Social safety nets; Food-for-work programmes; PSNP; Ethiopia;

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