Implications of rainfall shocks for household income and consumption in Uganda

Type Report
Title Implications of rainfall shocks for household income and consumption in Uganda
Publication (Day/Month/Year) 2007
Much of Uganda’s agricultural production activities are rain-fed, meaning that changes
in weather conditions have important implications for households’ total agricultural
production and wellbeing. This study uses a basic model of household production to
assess the impact of rainfall shocks (using rainfall variability) on farm income and
consumption expenditure and the response of households to such shocks. Pooled cross
sectional data of farm households are derived from the Uganda National Household Surveys
for 1992/93, 1999/2000 and 2002/03, which provide a rich source of information on
individual and household characteristics (size, age, sex, education, employment, etc.),
household income, expenditure, and exposure to risk/shocks. Rainfall statistics are obtained
from various issues of the Statistical Abstracts and the Background to the Budget.
We show that rainfall shocks have important implications for both income and
consumption of households, with strong policy implications towards cushioning
agricultural households. Higher than average rainfall in the first planting and first harvest
seasons is found to result in lower incomes and consumption. Given that about 40% of
Uganda’s total output is obtained from rain-fed agriculture, the impact of rainfall variability
on household welfare has important implications for national income. It is also noted that
other factors such as ownership of land, education of the household head and household
size are important in the determination of household welfare. Community characteristics
such as access to electricity, markets and infrastructure in general play a very important
role in the welfare of agricultural households.
Programmes to protect households against rainfall shocks such as irrigation schemes,
storage facilities for dry produce, staggered planting and crop diversification can provide
helpful avenues to reduce income variability among agricultural households. In order to
reduce welfare variability and poverty in general, it is necessary to continue the focus on
education and targeting of poor and vulnerable households in terms of access to education,
health care and other welfare programmes. Access to land has strong implications for
both income and consumption - households with access to larger land areas are likely to
have higher incomes and higher consumption expenditures - suggesting that land policies
to improve access are needed so as to enhance incomes of agricultural households.

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