Financing agricultural drought risk through ex-ante cash transfers

Gabriela Guimarães Nobre; Frank Davenport; Konstantinos Bischiniotis; Ted Veldcamp; Brenden Jongman; Chris Funk; Gregory Husak; Philip J. Ward; Jeroen C.J.H. Aerts

doi:10.1016/j.scitotenv.2018.10.406

Financing agricultural drought risk through ex-ante cash transfers

Science of the Total Environment

By: Gabriela Guimarães Nobre, Frank Davenport, Konstantinos Bischiniotis, Ted Veldcamp, Brenden Jongman, Chris Funk, Gregory Husak, Philip J. Ward, and Jeroen C.J.H. Aerts

https://doi.org/10.1016/j.scitotenv.2018.10.406

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Abstract

Despite advances in drought early warning systems, forecast information is rarely used for triggering and financing early actions, such as cash transfer. Scaling up cash transfer pay-outs , and overcoming the barriers to actions based on forecasts, requires an understanding of costs resulting from False Alarms, and the potential benefits associated with appropriate early interventions. On this study, we evaluate the potential cost-effectiveness of cash transfer responses, comparing the relative costs of ex-ante cash transfers during the maize growing season to ex-post cash transfers after harvesting in Kenya. For that, we developed a forecast model using Fast-and Frugal Trees that unravels early warning relationships between climate variability, vegetation coverage, and maize yields at multiple lead times. Results indicate that our models correctly forecast low maize yield events 85% of the time across the districts studied, some already six months before harvesting. The models’ performance improves towards the end of the growing season driven by a decrease of 39% in the probability of False Alarms. Overall, we show that timely cash transfers ex-ante to a disaster can often be more cost-effective than investing in ex-post expenditures. Our findings suggest that early response can yield significant cost savings, and can potentially increase the effectiveness of existing cash transfer systems.

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Additional publication details
Publication type	Article
Publication Subtype	Journal Article
Title	Financing agricultural drought risk through ex-ante cash transfers
Series title	Science of the Total Environment
DOI	10.1016/j.scitotenv.2018.10.406
Volume	653
Year Published	2019
Language	English
Publisher	Elsevier
Contributing office(s)	Earth Resources Observation and Science (EROS) Center
Description	13 p.
First page	523
Last page	535
Country	Kenya
Google Analytic Metrics	Metrics page