The Impact of Drought on Household Vulnerability: The Case of Rural Malawi

This study analyzes the impact of drought on household vulnerability using a two-period panel dataset of 259 rural households in Malawi. It defines vulnerability as expected poverty, and employs the methodology proposed by Christiaensen and Subbarao (2004). The paper shows that rural households in Malawi experienced multiple shocks between 1999 and 2006, with drought remaining the most prominent shock in both survey rounds. Study findings include:

• Recurrent droughts are associated with higher levels of vulnerability to poverty;
• Rural households depend on safety net programs to cope with drought;
• Targeted direct welfare transfers should be promoted as a short-term intervention to help poor households smooth their consumption;
• Social protection interventions should go beyond direct welfare transfers to incorporate productivity-enhancing safety nets;
• Government of Malawi's agricultural input subsidy program should be encouraged as a short-term strategy.

The paper states that in the long-term, small and medium scale irrigation schemes must be promoted to enhance food crop production. Irrigation would contribute towards reducing overall dependence on rain-fed agriculture. Weather-indexed insurance should also be promoted.