Charlotte Janssens is a postdoctoral researcher in agricultural economics at KU Leuven (Belgium). In the academic year 2023 – 2024, Charlotte is doing a research stay in France at the INRAE-AgroParisTech joint research unit Paris-Saclay Applied Economics and at the Department of Geosciences at ENS. The research findings presented in this blogpost are based on one of the articles from Charlotte’s PhD, which she obtained in December 2022 (preprint).
Extreme climate events such as droughts and floods are expected to become more widespread, frequent, and intense in the future (Seneviratne et al. 2021). Coping with these extreme events will be a huge and inevitable challenge for policy makers, especially in developing countries where harvest failures pose severe food insecurity risks. For example, starting in 2020, an unprecedented extreme, widespread, and multi-season drought in the Horn of Africa contributed to over 22 million people facing acute food insecurity (FEWS NET). Extreme events do not occur everywhere at the same time nor every year. Temporary and localized food shortages may therefore be buffered by relying on trade or storage. When a shock hits a specific area, the reduction in local food supply and the rise in local food prices could trigger a release of food stocks and an inflow of food from other parts of the country or from international markets. While this seems evident, there is still little empirical evidence whether and when such market mechanisms are effective in smoothing food consumption in the face of climate variability.
In this paper, I study the buffering role of trade and storage on food insecurity in the face of climate extremes in Sub-Saharan Africa. Sub-Saharan Africa is an important region to study this topic as it faces large food security challenges and is characterized by rainfed agriculture and highly variable climatic conditions. Years of adequate rainfall and bumper harvests alternate with years of droughts, floods, and harvest failures. Figure 1 illustrates periods of exceptionally dry conditions for three countries in Sub-Saharan Africa. Ethiopia faced widespread dry conditions in 2011, 2015 and 2016, Kenya in 2009 and 2011, and Zambia in 2015. In Ethiopia and Kenya, the dry years coincided with elevated imports of cereals from the world market. In Zambia, the drought year coincided with a depletion of cereal stocks that had been build up during a bumper maize harvest in the previous agricultural season (Chapoto et al. 2015). These observations raise the question whether such market responses are effective in reducing the food insecurity impacts of climate extremes.
To answer this question, I first develop a theoretical model to explain under which economic and climatic conditions market-based consumption smoothing is likely to occur and under which conditions it is not. Smoothing through storage or trade is less likely when households are faced with high transaction costs to sell agricultural produce on the market or to buy food from the market. Smoothing through trade is also limited when households face borrowing constraints. The theoretical analysis leads to three predictions that I test in the data: (1) for households that are isolated from markets, food consumption is more responsive to local climate extremes; (2) for regions that are isolated from the world market, food consumption is more responsive to local and national climate extremes; and (3) storage and trade are partly substitutes in smoothing food consumption, with the degree of substitutability reducing when climate shocks are temporarily correlated. When shocks persist for multiple years, storage becomes less effective as stocks will become saturated in the case of recurring positive shocks or run out in the case of recurring negative shocks. International trade is less affected because the availability of imports from foreign markets or the capacity of foreign markets to absorb domestic surpluses does not depend on the recurring nature of domestic shocks.
What does the data tell us?
I use data on food insecurity from the Famine Early Warning Systems Network at the level of secondary administrative regions in 12 countries in Sub-Saharan Africa in the period 2009-2016. I find that in the event of both extreme dry and wet conditions, the likelihood of food insecurity increases, but with heterogeneity across agro-ecological zones. Extreme dry conditions are particularly detrimental in arid zones, while extreme wet conditions are detrimental in humid zones. Next, I investigate whether the impact of climate extremes changes with regions’ market access. I use travel times to the closest city and to the closest port as measures of local and international market access, respectively. In line with what we expect from the theory, I find that in regions that are more remote, dry conditions have a larger detrimental impact on food insecurity. I further find that international imports and storage are partly substitutable in buffering the food insecurity impacts of climate extreme. The substitutability reduces for dry conditions that persists for multiple years.
What are the implications for policy makers?
This paper provides insights on how markets can contribute to buffering climate extremes. The findings show that trade and storage are partly substitutes in buffering food insecurity impacts. This implies that coping strategies can, to some extent, be tailored to countries’ own context, including countries’ borrowing constraints and infrastructure. A country that already has storage facilities in place can further invest in reducing the costs and increasing the effectiveness, for example by stimulating private sector involvement and improving within-country distribution of the storage facilities (The World Bank 2021). A country that already has a diverse export activity or a growing export potential can further invest in the performance of its export sectors, thereby building up the necessary foreign exchange to cover years with enhanced food import needs. At the same time, it is important to establish some capacity for both market mechanisms given their complementarity in buffering climate extremes with different spatiotemporal patterns, including multi-year and widespread events.
Interview with the author
Q: You have previous work on the role of trade as a climate change adaptation mechanism. How did you come up with the idea of exploring jointly storage and trade as coping strategies?
I had indeed previously studied agricultural trade as a coping strategy to climate change impacts on food supply. In that work, we investigated the impact of climate change on the suitability of agricultural production in the long-run, that is, by 2050. While we were able to show that food availability would reduce due to future global warming, and trade could partly buffer this, I started to worry towards the end of the project that we were underestimating climate change impacts. This because we did not consider the increase in the annual variability of crop yields that is projected to happen due to a higher prevalence of climate extremes and shocks (droughts, heatwaves, floods, irregular seasons, …). I therefore started to explore the literature on trade and variability, and with the help of other researchers and key papers, I realized that when it comes to buffering variability, trade and storage are closely related.
Q: In general terms, which ways do you use to generate new research ideas?
My research ideas are in general always closely linked to the societal issues that I strongly care about, climate change and food security, and the economic systems that I am intrigued about, international trade and agricultural development. I would advise early-career researchers to stay close to the topic or issue that intrinsically motivates and interests them. To turn a vague idea into a specific research question, you should inform yourself about the current challenges and uncertainties related to your topic or issue of interest. You can do so by talking to researchers and stakeholders (at events, conferences, or by sending targeted mails), but equally so just by following the news. Once you have found a question that you want to address, you combine this with your specific background, technical skills, and working environment to get to a fitting research approach. Do not hesitate to change the approach along the way, while keeping your core topic of interest as your central guidance.
Q: Do you have advice for researchers interested in climate change and its impact on developing countries?
My first advice is to go for it! This is an important research topic that can still benefit a lot from research, and this by researchers of different origins and at all career-stages. It is unmistakable that global warming is happening and will worsen in the coming decades (by exactly how much it will worsen, will be determined by our ability to transform our way of producing, consuming, and living at global scale). The impacts of global warming will fall proportionally more on developing countries and as such, we need research to helps us understand how to adapt across all aspects of society: agriculture, transport, health, education, industry, energy, … Lots of work to be done!
