Conflict-Risk and Agricultural Portfolios: Evidence from Northern Uganda

Abstract

Although the impact of insecurity on agricultural decisions is widely discussed, it remains largely unstudied empirically. This study estimates the effect of risk of violence on livestock and crop portfolios using spatially disaggregated risk measures and data from over 690,000 households, approximately 75 per cent of all rural households in Northern Uganda. As the risk of violence increases, households decrease their livestock holdings while shifting its composition towards smaller, less risky animals that can be kept within villages. The similarly strong shifts in the choice of crops, however, are not always consistent with a shift towards less risky crops. Since households remain reliant on agriculture, these ex ante behavioural responses to insecurity suggest important consequences for welfare.