The Effect of Climate Risk on Agricultural Inputs Use of Western African Smallholders: A Panel Data Analysis through CRE–PPML

Weather variability is one of the primary sources of risk in farming, differentiating this sector by most other economic activities. As a risk factor, it may not only im- pact farmers directly when detrimental realizations occur, but also indirectly by shaping their behavioural responses. The present paper investigates the role of climate risk in shaping farmers’ decisions on three important agricultural inputs: inorganic and organic fertilizers, and pesticides. By using a short but large panel spanning over eight West African countries, we test several long–term climate risk indicators through Poisson Pseudo Maximum Likelihood adopting the Correlated Random Effect device. Hurdle models are further adopted to disentangle the effects on adoption rate and on intensity of use. The scarcity of precipitations negatively impacts both the adoption and the in- tensity of use of pesticides. For organic and inorganic fertilizers, instead, adoption is negatively affected, while intensity, among the adopters, is fostered. All other tested indicators of climate risk are not significant. The risk of scarce precipitations can be identified as a cause of under–utilization of agricultural inputs in Western Africa that deserves to be addressed.