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close this book Measuring drought and drought impacts in Red Sea Province
close this folder 4. Drought, the market, and the impact of food aid in Red Sea Province, 1980 to 1989. Roy Cole
View the document Summary
View the document Introduction
View the document Drought and the market
View the document Cereals prices
View the document Livestock prices
View the document Cereals and livestock price changes
View the document Conclusion and discussion
View the document The impact of the July change in government on livestock prices
View the document Comments on continued general free food distribution
View the document Limitations of the study
View the document References

Drought and the market

Movements of prices probably are the most significant factor affecting the wellbeing and even the survival of the majority of people in the world today. Environmental variations such as drought change the relationship between marketed commodities through the production of relative scarcities and abundance. Sen (1981) demonstrated two entitlement relations that are affected by drought but have different relations to the market: direct and indirect entitlements.

A direct entitlement is best characterized farmers who produce the same good that they consume. These people do not have to enter the market to obtain their staple cereal. The herder, in contrast, with an indirect entitlement is obliged to enter into a market relation to get cereals. Sen identified three features of the indirect entitlement that make the impact of economic stress on pastoralists more significant than for farmers.

1. Cereals are cheaper nutrition at normal prices than livestock. In a situation of environmental stress demand shifts in that direction. Under ordinary circumstances the herder obtains cereal calories cheaply through the exchange of animals for grain. In situations of economic stress the herder is impelled to be even more dependent on cereals. This is why a drought that reduces both the animal stock and the grain output often leads to a decline in the terms of trade of livestock to cereals (Sen 1981).

2. Livestock for pastoralists are both production and capital. In periods of stress there is a "bigger burden of adjustment on animal supply to the market to meet the herdsman's grain demand as well as his other needs for cash" (Sen 1981: 110-111).

3. Consumption of the infinitely divisible and liquid cereal is more controllable than that of livestock.

In reality, pure pastoralists are rare. Most people who raise livestock have several occupations as a means of spreading risk. Most Beja in Red Sea Province farm as well as herd and engage in many other activities as well.