Livestock as an Imperfect Buffer Stock in Poorly Integrated Markets

Livestock holdings in rural areas of the West African Semi-arid Tropics (WASAT) are often substantial yet there is little evidence for precautionary saving in the form of livestock. This paper re-visits farm households' ability to smooth consumption ex post via savings in the form of livestock. Based on data covering Burkina Faso's 2004 drought, we find that livestock sales increase significantly in response to drought with households citing the need to finance food consumption. Some consumption smoothing is achieved via adjustments to grain stocks, but households apparently fail to smooth consumption by adjusting livestock holdings. We argue that this seemingly contradictory finding is largely due to a decrease in relative livestock prices during droughts. This renders selling livestock a costly coping strategy and underlines the need for market integration.

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Publication Type:
Working or Discussion Paper
DOI and Other Identifiers:
ISSN (2192-3248) (Other)
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JEL Codes:
D14; D91; O16; Q12
Series Statement:
GlobalFood Discussion Paper

 Record created 2017-04-01, last modified 2018-01-23

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