The role of social protection in mitigating the effects of rainfall shocks. Evidence from Ethiopia

We study how participation in various social protection schemes can mitigate the negative relationship between adverse rainfall shocks and agricultural production, thus acting as a tool for climate change adaptation. We use panel data from Ethiopia, analyzing the influence of these programs on the technical efficiency of smallholder farmers and how these effects on agricultural production change in the presence adverse rainfall shocks. We find heterogeneous effects of social protection. Public works are negatively associated with productive efficiency, especially in the presence of negative shocks. Recipients of free food display higher sales and profits while cash transfers are more neutral to production and positively associated with farming profitability.