1. GLOBAL PRICE INCREASE Potential Impacts on Livelihoods
Examples taken from 1 urban slum in Nairobi & 1 pastoral community in NE Kenya – Analysis of poor households

2. BASELINE AND SHOCK ANALYSIS
We start by understanding how households normally live….

3. BASELINE AND SHOCK ANALYSIS
…then we incorporate the impact of a change….

4. BASELINE AND SHOCK ANALYSIS
…and finally look at how people might cope
The analysis suggests that post-shock, households will not be able to maintain their normal livelihood assets without assistance.
Livelihoods Protection Threshold
Gap
Survival Threshold

5. Analysis Assumptions – Price increase
Price increase on global markets (United States)
Maize: + 46% in April 2008 compared to April 2007
Price increase in Kenya
No evidence so far
In this exercise we ran
2 scenarios:
Price increase of 25%
Price increase of 50%

6. Urban Analysis – poor household
55% of the pop., rent houses, dirt floor, no electricity. HH size 6-7, single headed
Food access – purchase 90-95% of food needs (74% of this are cereals)
Economic activities – unskilled casual labour in industrial areas, kiosks, hawkers, porters – income range Ksh 40,000 – 100,000 per annum

7. Impact on urban poor – Mukuru Kwa Ruben Scenario - 25% price increase
Impact on food sources
Impact on expenditure
Gap =
They cope with increased expenditure on staples by:
buying cheaper calories
reducing expenditure on non- staple, social services & other
The impact of the shock will cause households to have a 40% food deficit before coping

8. Impact on urban poor – Mukuru Kwa Ruben Scenario - 50% price increase
Impact on food sources
Impact on expenditure
Gap = 6, /-
They cope with increased expenditure on staples by:
buying cheaper calories
reducing expenditure on non- staple, social services & fuel
relying on gifts
The impact of the shock will cause households to have a 40% food deficit before coping

9. Implications of coping – Price increase
Expand income by engaging in negative coping strategies - prostitution, brewing, theft
Reduce quality of diet & # of meals – reduce expenditure on sugar, milk & oil (50%) and vegetables
Reduce expenditure on soap, fuel & clothes etc (50%)
Reduce expenditure on accessing social services – health, education, water
Rely on gifts from rural home
People will not die from hunger in case of price increase. However, the yearly lack of investment in human and productive assets is huge and will have the following consequences:
Remaining low education and literacy level
Frequent human health crises (Cholera, Diarrhoea…)
No recovery of herds during good seasons, thus higher sensibility to droughts
Increase of destitute households around “urban” centres

10. Assumptions for pastoral analysis
1) Food Aid Distribution has already decreased compared to 2007 – likely to decrease further?
In this exercise, we assume that poor households (30% of population) reduce their access to food aid from 60% (baseline 06/07) to 34% in April based on the fact that 23% of the population received a 75% ration in April 2008.
2) North Eastern province has been impacted by drought almost on a continuous basis since 2003 so livestock holdings have been depleted during times of drought with little time for recovery
Here we consider that herd growth was constant

11. Impact in pastoral livelihood zone Scenario - 25% price increase & 60% food aid
Impact on food sources
Impact on expenditure
Gap = 1 shoat
They do this by:
increasing self employment
rely on gifts
reduce expenditure on non-staple & other
Sell 2 additional shoats
The impact of the shock will cause households to have a 44% food deficit before coping

12. Impact in pastoral livelihood zone Scenario - 50% price increase & 60% food aid
Impact on food sources
Impact on expenditure
Gap = 4 shoats
They do this by:
increasing self employment
rely on gifts
reduce expenditure on non-staple & other
Sell 2 additional shoats (4-6)
The impact of the shock will cause households to have a 44% food deficit before coping

13. Implications of coping – Price increase
Expand on collection & sale of bush products – indirect costs
Reduce expenditure on sugar, milk & oil (50%)
Reduce expenditure on fuel & clothes etc (50%)
Unsustainable off-take from herd sizes – 2 shoats is acceptable – 4 is detrimental
No restocking
People will not die from hunger but the annual lack of investment in human and productive assets is huge and will have the following consequences:
Remaining low education and literacy level
Frequent human health issues (Diarrhoea = malnutrition…)
Depletion of assets - increased vulnerability
Increase of destitute households around “urban” centres
People will not die from hunger in case of price increase. However, the yearly lack of investment in human and productive assets is huge and will have the following consequences:
Remaining low education and literacy level
Frequent human health crises (Cholera, Diarrhoea…)
No recovery of herds during good seasons, thus higher sensibility to droughts
Increase of destitute households around “urban” centres