Implications of Rainfall Shocks for Household Income and Consumption in Uganda

"This study uses a basic model of household production to assess the impact of rainfall shocks (using rainfall variability) on farm income and consumption expenditure and the response of households to such shocks. Pooled cross sectional data of farm households are derived from the Uganda National Household Surveys for 1992/93, 1999/2000 and 2002/03, which provide a rich source of information on individual and household characteristics (size, age, sex, education, employment, etc.), household income, expenditure, and exposure to risk/shocks. Rainfall statistics are obtained from various issues of the Statistical Abstracts and the Background to the Budget. We show that rainfall shocks have important implications for both income and consumption of households, with strong policy implications towards cushioning agricultural households. Higher than average rainfall in the first planting and first harvest seasons is found to result in lower incomes and consumption. "