Drought and saving in West Africa: are livestock a buffer stock?

Households in the west African semi-arid tropics, as in much of the developing world, face substantial risk (an inevitable consequence of engaging in rainfed agriculture in a drought-prone environment). It has long been hypothesized that these households keep livestock as a buffer stock to insulate their consumption from fluctuations in income. This paper tests that hypothesis.

The article finds that:

• livestock transactions play less of a consumption smoothing role than is often assumed
• livestock sales compensate for at most thirty percent, and probably closer to twenty percent of income shortfalls due to village-level shocks alone

The article explains these results as follows:

• there is a presence of systematic mismeasure-ment of livestock transactions
• there are alternative, less costly strategies to deal with the consequences of draught. These strategies may have included off-farm strategies to smooth crop income fluctuations
• transfers serve to smooth consumption
• household units are reorganised
• buffer stocks other than livestock inventories are used