Institutional Co-Creation Interfaces for Innovation Diffusion during Disaster Management

Abstract

Climate variability with unexpected droughts and floods causes serious production losses and worsens food security, especially in Sub-Saharan Africa. This paper applies stochastic modeling to analyze smallholder adaptation to climate and price variability in Ethiopia. It uses an agent-based simulation package to capture non-separable production and consumption decisions at household level, considering livestock and eucalyptus for consumption smoothing as well as farmer response to policy interventions. We find the promotion of new maize and wheat varieties to be the most effective adaptation option, especially when accompanied by policy interventions such as credit and fertilizer subsidy. We also find that the effectiveness of available adaptation options is quite different across the heterogeneous smallholder population in Ethiopia. This implies that policy assessments based on average farm households may mislead policymakers to adhere to interventions which are beneficial on average albeit ineffective in addressing the particular needs of poor and food insecure farmers.