Coffee price risk in perspective - household vulnurability among rural coffee growing smallholders in rural Tanzania

TL;DRAbstract

Despite the precipitous decline in coffee prices in early 2000, cash crop growing smallholders in Kilimanjaro and Ruvuma, Tanzania, identified health shocks, droughts as well as commodity price declines as their major risk factors. About one third of the rural population in Kilimanjaro suffered either from drought or health shocks in 2003, resulting in 18 percent welfare loss. Through reliance on savings and aid they reduced this loss to 8 percent on average. In Ruvuma rainfall is more reliable and drought did not affect welfare. Surprisingly, health shocks appeared not to affect welfare either, most likely related to lower observed medical expenditures in case of illness given limited access to health facilities. Coffee growers appeared not worse off in 2003 than non-coffee growers, apart from the smallest ones in Kilimanjaro, whose consumption level was on average 20 percent lower, and the largest ones in Ruvuma, whose consumption levels appear larger. Interventions to improve health

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