Impact of climate-change risk-coping strategies on livestock productivity and household welfare: empirical evidence from Pakistan

Abstract

Using the primary datasets collected from 700 livestock farmers from all four major provinces of Pakistan and Azad Jammu and Kashmir (AJK) and Gilgit Baltistan, this paper analyzes the impact of climate-change risk coping strategies on household welfare. A Poisson regression model was used to estimate the determinants of the livestock ownership and multivariate probit model to assess the determinants of the measures taken to manage the climatic-risk challenge for livestock. A propensity score matching approach (PSM) was used to assess the impact of the adopted climate-risk management strategies on livestock farmers. Findings indicated that in Pakistan livestock farmers generally adopt four main types of strategies to cope with climate risk: livestock insurance, selling of livestock, allocation of more land area for fodder and migration. The results show that age, education, wealth, access to extension services, and membership in NGOs, influence the livestock farmers' choice of climate-risk-coping mechanisms. The livestock farmers who adopted risk-coping mechanisms generally fared better. Increasing the land area allocated to fodder seems to increase production of milk and butter, resulting in higher income and lower poverty levels. Those who bought insurance had more milk production and a lower poverty level, while those who sold livestock to cope with climate risk decreased production but increased household income and lowered poverty levels. Migration seems to have a negative impact on production and income. Impact assessments confirm that purchasing livestock insurance and increasing fodder areas are more effective compared to the selling of livestock and migration. Agricultural climate policy should focus on creating awareness as well as increasing access to extension services among livestock farmers on climate risk and risk-coping strategies to mitigate the impact on rural livelihoods