Journal
AMERICAN JOURNAL OF AGRICULTURAL ECONOMICS
Volume 100, Issue 1, Pages 115-144Publisher
WILEY
DOI: 10.1093/ajae/aax068
Keywords
Adaptation; climate; income diversification; maize; poverty trap; structural model; wealth; weather
Categories
Funding
- USDA National Institute of Food and Agriculture (NIFA) [2014-51130-22492]
- Purdue Research Foundation
- Department for International Development (DFID)/Malawi
- USAID/Malawi
- USAID's Environment, Growth, and Technology Division
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We use three waves of nationally representative household-level panel data from Malawi to estimate a structural model characterizing the response of smallholder farm households to current and past weather patterns, and the subsequent impacts on household net income. We also quantify heterogeneity among households along the wealth spectrum regarding their ability to adapt to evolving weather patterns. This approach yields two key findings. First, adverse weather history prompts households to devote more time to maize cultivation on their own farms, to the detriment of other, possibly more remunerative income sources. Households also reduce application of productivity-enhancing inputs, such as fertilizer and improved maize varieties, in response to adverse weather history. Our results are robust to different clustering structures and falsification tests aimed at ruling out alternative explanations to observed trends. Second, we find that, by maintaining a more diversified income structure, wealthier households are better able to adapt to adverse weather history. Consequently, adverse changes in past weather may be regressive in nature, creating a climate-induced poverty trap that locks poor smallholder households into low-value maize cultivation from season to season. This finding suggests that developing more weather-resilient maize varieties and promoting smallholder livelihood diversification strategies may help mitigate the effects of adverse weather on the most vulnerable households.
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