Book Description

The El Nino Southern Oscillation (ENSO) weather event of 2015/16 caused severe drought conditions in northern and central Ethiopia affecting the welfare of millions of farmers in late 2015 and early 2016. Using nationally representative panel data collected in 2012 and 2016 and recent advances in the difference-indifferences literature, this paper explores the effects of the 2015/16 drought and the potential role of irrigation in reducing the adverse effects of the drought. We find that the drought caused, on average, a 37 percent reduction in net annual crop income, an 8 percent decline in area cultivated, a 3 percent decline in household dietary diversity score, and a 10 percent decline in the share of harvest sold for rainfed farmers. On the other hand, irrigating farmers affected by the drought managed to increase their daily expenditures by 72 percent of their average daily food expenditure in the pre-drought period, and maintained their net crop income, size of cultivated land, household dietary diversity, and share of harvest sold to the market. Overall, while rainfed agricultural producers suffered sharp declines in welfare, those farmers with access to irrigation maintained their economic status. The results suggest that irrigation protected farmers from the adverse effects of the 2015/16 ENSO event and given increasing climate variability in Ethiopia, the government should intensify its investment and support to irrigation development in the country.