1. Andean Livelihood Strategies and the Impact of Market and Climate Shocks: Risks Perceptions and Coping Mechanisms Corinne Valdivia, Elizabeth Jimenez Jere Gilles, Alejandro Romero and Leonie Marks University of Missouri MU Universidad de la Cordillera UC

2. Outline Introduction - diversity and adaptation Theoretical framework: overview & hypothesis The sites and data Methods results and analysis Conclusions

3. Introduction Climate change and food security (Loeb et at, 2008; Brown and Funk, 2008, Science) Climate change and Andean livelihoods – trends and projections Livelihoods, capitals, and decisions – perceptions of risks

4. Purpose To determine the perceptions about climate and market risks given the livelihood strategies defined by income, human capital and life cycle characteristics. Under objective 2, understand how risk perceptions shape livelihood strategies and decisions to include new knowledge in practices and strategies; how to communicate climate information in this context.

5. Theoretical Framework Sustainable livelihoods (Chambers and Conway; Ellis). Shocks impact on livelihoods in the Andes: climate, prices, political uprising, and idiosyncratic events. Diversification of the economic portfolio to smooth income (Valdivia et al; Reardon et al). Liquidating assets, temporary migration, remittances to smooth consumption (Zimmerman and Carter). Risk perception rather than actual risk can influence decision making (Rockstrom et al.).

6. Rural Livelihood Strategies Conditions: Production and consumption interlinked Markets are unreliable Limited credit markets Smoothing of consumption affects productive assets Social dimensions to accessing resources relevant Activities OutputsOutcomes Assets

7. Coping and Adapting Ex-ante: Income Smoothing –Diversifying: within agriculture selling labor value added –Seasonal migration –> less covariant activities in the household portfolio Ex-post: Consumption Smoothing –Loans –Sale of assets –Migration Adapting: Recovering, reducing, avoiding shocks and stresses – Incorporating climate resilient strategies Valdivia, 2004

8. Working Hypotheses Income, education and life cycle determine distinct clusters of livelihood strategies Perceived climate risks are the most significant risks facing communities, where perceptions of risks rank higher when there are less assets to cope with shocks

9. The sites and data

10. Andean Climate Variability and Change Climate variability - inter annual variability & spatial variability ENSO (El Niño Southern Oscillation) - spatial variability Climate trends – the past 30 years - spatial variability Climate Change 2030-50 and 2099, global models – Altiplano grid (Seth and Thiebault 2008)

11. Ancoraimes FourRuralCommunities 3850 - 4300

12. Umala 4 rural communities 3,770 - 4,070m

13. Regional Differences

14. Income Level & Diversification: differences Jimenez Valdivia and Romero

15. Human Capital: gender differences

16. Natural Capital: Land Use and Size Ancoraimes and Umala

17. Natural Capital: crop diversification Dread of pests in disease high Dread of frosts, floods, drought differentiated by region

18. Livestock Assets

19. Social Capital: individual’s participation within producer and community organizations Differences in the nature of social capital and articulation to markets

20. Access to credit is limited Availability of contingency markets to buffer shocks varies by region communities and households

21. Cluster Analysis Variables – total income, years of schooling of head of household, age of head of household Three groups identified –IActive – productive stage life cycle –IIActive – early stage life cycle –IIIPasive (pasivos) - elderly

23. Capitals Differences Among Groups

24. Dealing with climate events

25. Perception of risks by cluster Umala Climate Risks (0= No risk; 5 = high risk) Cluster Groups CCHailFrostDrought Floods I 3.63 4.074.324.674.23 II 3.79 3.834.414.764.28 III 3.89 4.034.444.764.37 Market Risks Pests Cluster GroupsLow crop prices Low livestock prices I3.533.633.08 II3.533.633.22 III3.813.983.56

26. Perception of risks Ancoraimes Climate Risks (0= No risk; 5 = high risk) Cluster Groups CCHailFrostDrought Floods I 3.753.83.753.633.88 II 4.083.713.923.863.92 III 3.93.713.93.704.08 Market Risks Crop Prices Livestock Prices Pests I3.634.13 3. 5 II3.853.95 III3.893.93 3.86

27. Analysis Cluster analysis identified three groups in each region – differences in income are significant between groups and regions All groups experience shocks in at least 70 percent in Umala; and 99 percent in Ancoraimes Greater access to alfalfa, cropping area and diversity of potato varieties in Umala, while greater diversity of crops in Ancoriames groups Larger amounts and significant differences in ownership of cattle sheep and camelids among groups in Umala – greater accumulation of assets In Ancoraimes: Remittances play a larger role in total income; sale of livestock a strategy to cope with shocks In Umala: Savings and migration are the major strategies in coping

28. Conclusions The perceptions of risks varied by region – consistent with the observed climate trends of the last 30 years in North and Central Altiplano Land fragmentation (low access to land) and shocks lead to migration Coping with shocks –> lack of contingency markets Depletion of assets when high degree of covariant shocks (See also poster by Rees)

29. Thank you Questions