With a Little Help : Shocks, Agricultural Income, and Welfare in Uganda

Global poverty is becoming increasingly concentrated in Sub-Saharan Africa and among households engaged in subsistence agriculture in environments characterized by uncertainty. Understanding how to achieve sustainable increases in household incomes in this context is key to ending extreme poverty. Uganda offers important lessons in this regard. Uganda experienced conflict, drought, and price volatility in the decade from 2003 to 2013, while at the same time experiencing the second fastest percentage point reduction in extreme poverty per year in Sub-Saharan Africa. This study analyzes a nationally representative panel of 2,356 households visited four times between 2006 to 2012, in combination with data on conflict events, weather, and prices. The study describes the type of income growth households experienced and assesses the importance of these external events in determining progress. The study finds substantial growth in agricultural incomes, particularly among poorer households. Many of the gains in agricultural income growth came about because of good weather, peace, and prices, and not technological change or profound changes in agricultural production. Therefore, although overall progress during this period was good, there were years in which average income growth was negative. This was particularly the case in the poorer and more vulnerable Northern and Eastern regions, and thus their overall income growth was also slower