Rural Poverty, Risk and Development
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Rural Poverty, Risk and Development

Marcel Fafchamps

This book investigates the relationships between rural poverty, risk, and development. Building upon the author’s work in the area, it summarises the contributions of recent theoretical and empirical work to our understanding of how risk affects rural poverty levels in developing countries. In particular the book examines what we do and do not know about risk coping strategies among today’s poor rural societies. Ways in which these strategies may be re-examined and improved by governments and international organisations are proposed.
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Chapter 4: The Limits to Risk Coping

Marcel Fafchamps


We have reviewed in great detail a variety of individual and collective strategies on which poor rural households rely to cope with risk. These strategies do not always work, however. In this chapter we examine some of the factors that render particular strategies ineffective. Evidence regarding the most serious constraints is also discussed. 4.1 4.1.1 THE LIMITS TO SELF-PROTECTION Technological and Environmental Constraints Technological and environmental constraints put limits on households’ ability to reduce their exposure to risk. Income diversification may be impractical either because returns to alternative activities are too low to warrant investing in them, or because increasing returns call for specialization. Millet in the Sahel is a good example of a case in which environmental constraints limit the options open to rural households. After centuries of informal breeding by Sahelian farmers, millet has developed into an incredibly sturdy plant capable of growing extremely fast on precious little moisture and soil nutrients. Thanks to millet, African farmers have pushed the limits of cultivation further into the Sahara desert than was thought possible. The corollary of this success, however, is that no other plant can compete with millet, let alone beat it. As a result, the monoculture of millet is the norm in much of the Sahel (Matlon and Fafchamps 1989). Similar reasoning explains why drought or trypanosogmiasis resistant livestock breeds are the only ones encountered in drought or trypanosomiasis prone areas. Pastoralism is a good illustration of a situation in which income diversification is traded...

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