Andean Livelihood Strategies and Andean Livelihood Strategies and the Impact of Market and Climate the Impact of Market and Climate Shocks: Risks Perceptions and Shocks: Risks Perceptions and

Coping MechanismsCoping Mechanisms

Corinne Valdivia, Elizabeth JimenezJere Gilles, Alejandro Romero and Leonie Marks

University of Missouri MUUniversidad de la Cordillera UC

Outline• Introduction - diversity and adaptation• Theoretical framework: overview &

hypothesis• The sites and data• Methods results and analysis• Conclusions

Introduction

• Climate change and food security (Loeb et at, 2008; Brown and Funk, 2008, Science)

• Climate change and Andean livelihoods – trends and projections

• Livelihoods, capitals, and decisions – perceptions of risks

Purpose

• To determine the perceptions about climate and market risks given the livelihood strategies defined by income, human capital and life cycle characteristics.

• Under objective 2, understand how risk perceptions shape livelihood strategies and decisions to include new knowledge in practices and strategies; how to communicate climate information in this context.

Theoretical Framework • Sustainable livelihoods (Chambers and Conway;

Ellis). • Shocks impact on livelihoods in the Andes:

climate, prices, political uprising, and idiosyncratic events.

• Diversification of the economic portfolio to smooth income (Valdivia et al; Reardon et al).

• Liquidating assets, temporary migration, remittances to smooth consumption (Zimmerman and Carter).

• Risk perception rather than actual risk can influence decision making (Rockstrom et al.).

Rural Livelihood Strategies

Conditions:• Production and

consumption interlinked• Markets are unreliable• Limited credit markets • Smoothing of

consumption affects productive assets

• Social dimensions to accessing resources relevant

Activities

Outputs Outcomes

Assets

Coping and AdaptingEx-ante: Income Smoothing

– Diversifying: • within agriculture• selling labor • value added

– Seasonal migration– > less covariant

activities in the household portfolio

Ex-post: Consumption Smoothing– Loans– Sale of assets– Migration

Adapting:• Recovering, reducing,

avoiding shocks and stresses – Incorporating climate resilient strategies

Valdivia, 2004

Working Hypotheses

• Income, education and life cycle determine distinct clusters of livelihood strategies

• Perceived climate risks are the most significant risks facing communities, where perceptions of risks rank higher when there are less assets to cope with shocks

The sites and data

Andean Climate Variability and Change

• Climate variability - inter annual variability & spatial variability

• ENSO (El Niño Southern Oscillation) - spatial variability

• Climate trends – the past 30 years - spatial variability

• Climate Change 2030-50 and 2099, global models – Altiplano grid (Seth and Thiebault 2008)

Ancoraimes Ancoraimes

Four Four Rural Rural CommunitiesCommunities3850 - 43003850 - 4300

UmalaUmala

4 rural 4 rural communitiescommunities3,770 - 4,070m3,770 - 4,070m

Regional Differences

Income Level & Diversification: differences

Household income levels in Umala are twice the income of Ancoraimes

0500

100015002000250030003500400045005000

Ancoraimes Umala

Ann

ual I

ncom

e in

$us

Other sources ofincome

Income for independentactivities

Income from wages

Income for agriculturalactivities

Jimenez Valdivia and Romero

Human Capital: gender differences

In both contexts, women have lower schooling than men

012345678

Ancoraimes Umala

Year

s of

sch

oolin

g

Male Female

Natural Capital: Land Use and Size Ancoraimes and Umala

Hectareas de terreno (2005-006)

0

1

2

3

4

5

Sembradas Descanso Pastizales Alfares

Uso de la tierra

Has

Ancoraimes Umala

Natural Capital: crop diversification

Greater crop diversification in Ancoraimes

0

10

20

30

40

50

1 2 3 4 5 6 7 8

Number of CropsPo

rcen

tage

Ancoraimes Umala

Greater diversity of potato varieties in Umala

0

10

20

30

40

1 2 3 4 5 6 8 9 11

Number of varieties

Porcen

tage

Ancoraimes Umala

Dread of pests in disease high Dread of frosts, floods, drought differentiated by region

Livestock Assets

Tenencia de ganado

05

10152025303540

Ove

jacr

iolla

Ove

jam

ejor

ada

Vacu

nocr

iollo

Vacu

nom

ejor

ado

Porc

ino

Auqu

énid

o

Prom

edio

Ancoraimes Umala

Social Capital: individual’s participation within producer and community organizations

Participation in community organizations is basically the same in both sites

0

20

40

60

80

100

Producer Organizations Community Organizations

Porc

enta

ge

Ancoraimes Umala

Differences in the nature of social capital and articulation to markets

Access to credit is limitedAcceso a crédito en los últimos 5 años

0%10%20%30%40%50%60%70%80%90%

100%

Ancoraimes Umala

No

Si

Fuente de crédito

0%

20%40%

60%80%

100%

Ancoraimes Umala

Banco, Ongs Financieras Amigos, Familiares

Availability of contingency markets to buffer shocks varies by regioncommunities and households

Cluster Analysis

• Variables – total income, years of schooling of head of household, age of head of household

• Three groups identified – I Active – productive stage life cycle– II Active – early stage life cycle– III Pasive (pasivos) - elderly

UMALA

GRUPOIACTIVOS

Hogares en etapa productiva del ciclo de vida

y con altos ingresos

GRUPOIIJOVENES

Hogares jóvenes de medianos ingresos, con mayor capital

humano

GRUPOIIIPASIVOS

Hogares en etapa

descendente del ciclo de vida, con

menores ingresos y menor capital humano

ANCORAIMES

GRUPOIACTIVOS

Hogares en etapa productiva del ciclo de vida

y con altos ingresos

GRUPOIIJOVENES

Hogares jóvenes de medianos ingresos, con mayor capital

humano

GRUPOIIIPASIVOS

Hogares en etapa

descendente del ciclo de vida, con

menores ingresos y menor capital humano

Capitals Differences Among Groups

I II III Sig I II III Sig

Total household income 32110 17531.2 12226 * 15056 7141 5676 *Sheep 41.3 24.9 22.9 * 24.5 15.6 19Cattle 8.2 7 5.1 * 3.8 2.5 2.8Improved Cattle 50.5 23.9 29.2 *Cash income 6667.6 2334 2673 * 6760 2977 2263.8Remittances 745.6 251.11 580.6 * 847.5 1162.86 642.38

Education HH 6.5 8.5 3.6 * 7.6 6.8 3.8 *Age HH 53 32.9 62.4 * 52.5 35 59 *

Alfalfa Ha 2.3 1.3 1.4 * 0.1 0.1 0.1Planted Ha 5.2 3 2.2 * 0.8 0.5 0.5Crops planted # 3 2.8 2.5 * 6 4.8 4.6 *Varieties of potatoes 4.1 3.8 3.4 * 2.4 2.2 1.9

Human Capital :

Natural Capital :

Umala Ancoraimes

Financial Capital :

Dealing with climate events

I II III Sig I II III Sig

Sell sheep and cattle 0,02 0,13 0,04 0,88 0,74 0,76Use savings 0,69 0,52 0,51 0,75 0,62 0,60Migration 0,45 0,19 0,42 * 0,13 0,26 0,25

Obtained a loan duringthe last 5 years 0,27 0,28 0,19 0,38 0,33 0,19Loan obtained from relatives and/or friends 0,13 0,38 0,58 * 0,33 0,82 0,79

Coping strategies when crops are lost

Access to finantial services

Umala Ancoraimes

1 1 0,99Climate shocks affectedagricultural production 0,92 0,71 0,90

Perception of risks by cluster Umala

Climate Risks (0= No risk; 5 = high risk)

Cluster Groups CC Hail Frost Drought Floods

I 3.63 4.07 4.32 4.67 4.23

II 3.79 3.83 4.41 4.76 4.28

III 3.89 4.03 4.44 4.76 4.37

Market Risks Pests

Cluster Groups Low crop prices

Low livestock prices

I 3.53 3.63 3.08

II 3.53 3.63 3.22

III 3.81 3.98 3.56

Perception of risks Ancoraimes

Climate Risks (0= No risk; 5 = high risk)

Cluster Groups CC Hail Frost Drought Floods

I 3.75 3.8 3.75 3.63 3.88

II 4.08 3.71 3.92 3.86 3.92

III 3.9 3.71 3.9 3.70 4.08

Market Risks Crop Prices Livestock Prices

Pests

I 3.63 4.13 3. 5

II 3.85 3.95 3.95

III 3.89 3.93 3.86

Analysis • Cluster analysis identified three groups in each region –

differences in income are significant between groups and regions

• All groups experience shocks in at least 70 percent in Umala; and 99 percent in Ancoraimes

• Greater access to alfalfa, cropping area and diversity of potato varieties in Umala, while greater diversity of crops in Ancoriames groups

• Larger amounts and significant differences in ownership of cattle sheep and camelids among groups in Umala – greater accumulation of assets

• In Ancoraimes: Remittances play a larger role in total income; sale of livestock a strategy to cope with shocks

• In Umala: Savings and migration are the major strategies in coping

Conclusions • The perceptions of risks varied by region –

consistent with the observed climate trends of the last 30 years in North and Central Altiplano

• Land fragmentation (low access to land) and shocks lead to migration

• Coping with shocks –> lack of contingency markets

• Depletion of assets when high degree of covariant shocks

• (See also poster by Rees)

Thank you

Questions