ETHIOPIAN DEVELOPMENT RESEARCH INSTITUTE

Cows, missing milk markets and nutrition in rural Ethiopia

John Hoddinott, Derek Headey and Mekdim DerejeIFPRI ESSP

Ethiopian Economics Association (EEA) and the Econometric Society 19th Annual Conference of the African Region Chapter of the Econometric Society12th International Conference on the Ethiopian EconomyJuly 16-19, 2014Addis Ababa

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Structure of Presentation

Introduction

Data

Estimation strategy

Results and Discussion

Summary

Policy recommendations

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Introduction In rural areas, is child nutrition affected by what goods the household

produces?

Conceptually, if there are complete markets, production and consumption decisions are separable

=> production decisions do not affect consumption

But if markets are missing, this will no longer be true

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Introduction, cont’d Milk is an instructive good to consider

Missing markets are widespread because product is perishable• In Ethiopia, 85% of all milk produced is consumed by the producing household• Domestically processed milk is largely available only in urban areas

Milk is important for growth in early life• Cow’s milk contains insulin-like growth factor I (IGF-I) which plays a key role in

growth in early life. • Also important source of animal-sourced protein, amino acids, calcium, iron, B-

12 and other micronutrients

Reducing undernutrition is important for both intrinsic and instrumental reasons

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Data This study is based on Agricultural Growth Programme (AGP) baseline

survey data

Very large (n=7,930) household survey fielded in 2011.

Sample is drawn from high potential agricultural localities

Data collected on agricultural assets, agricultural production, foods consumed by children in previous seven days, anthropometry of children 0-60 months• Around one quarter of children consumed milk in the last 7 days; one of the

most important sources of protein for young children, in what is otherwise a highly undiversified diet

• About 64% of households own at least one cow• High level of stunting (47%)

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AGP enumeration areas(red) , major markets (yellow) and population density

Source: http://www.gafspfund.org/content/ethiopia. Market towns (light circles) are from FEWSNET, and population density at the woreda level is from the 2007 National Census of Ethiopia. Notes: Population density categories (in persons per square kilometer) from lightest to darkest are 0-31, 31-101, 101-139, 139-195, 195-537, 537 and above.

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The model and estimation strategy Starting from the basic agricultural household model, we consider

dimensions of nutrition. The resulting basic model is given by : where,

V(represent the outcome variables(frequency of milk consumption and nutritional status)

is Knowledge of good care practices (care givers education and age is for genetic endowments (child sex and age Z is local characteristics that might affect nutritional status (region dummy) represents taste variables ( religion, ethnicity) that might affect consumption. are respectively wage rate, prices of nutrients, other goods and prices of

agricultural goods produced by households. are farm capital and farm knowledge (land holding & cow ownership)

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Estimation strategy , cont’dWe use our cross sectional data to look at associations between owning at least one cow and:

1. Whether a child 6-24m consumes milk in the 7 days prior to the survey2. The number of days that the child consumes milk in the 7 days prior to the

survey3. Anthropometry, HAZ and stunting

We use regression techniques:

4. Probit for the first5. OLS (and poisson) for the second6. OLS and Probit for the third, respectively

Endogeneity concerns as the association we seek to establish might potentially be due to other factors in the regression. We run different sensitivity test for this.But this is not an experimental study and hence can’t completely rule out endogeneity

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Basic results

Household owns at least one cow: Impact on:

Marginal impacts on Anthropometry: 6-24m

Anthropometry: 12-24m

Any milk consumption in last 7 days

# days milk consumed in last 7 days Stunted Stunted

22.5%*** 1. 3 *** -5.5%* -9.9%***

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Basic results: Looking for missing markets

Food Market in village No food market in village

Any milk consumption

# days milk

consumed

Stunted12-24m

Any milk consumpti

on

# days milk

consumed

Stunted12-24m

Household owns cow 18.9*** 0.7** 11.4% 22.2%*** 1.3*** -12%***

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Discussion of the results1. Cow ownership considerably increases the likelihood of milk

consumption and also the frequency of milk consumption per week.

2. Cow ownership greatly reduces the likelihood of stunting3. When there is missing foods market in the village, we see higher

effect of cow ownership on both milk consumption and nutritional status.

4. To test the validity of the basic results, we run different tests: Including additional controls Different specifications Different estimation strategy Different data set (EDHS-2000)

Increase probability of daily milk consumption by 28 per.points Reduced stunting by 5.8 percentage points

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Summary

We present evidence that ownership of cows is associated with higher milk consumption by children 6-24m and in this age group, and especially in children 12-24m, improvements in HAZ and reductions in stunting

Magnitudes of effects are large – reduction in stunting of approximately 6-10 percentage points

Some evidence that the existence of food markets can partially substitute for own production

Need to be cautious; not an experimental study, though results are robust to a number of checks and alternative model specifications

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Policy recommendation

Chronically undernourished children accumulate less human capital in school and are more likely to be economically less productive as adults

This implies that interventions that reduce chronic undernutrition have high economic returns

Given our results, we see three possible classes of intervention:

1. Intervention to increase cow ownership Rural households commonly have the skill to keep milk cows The nutritional value of cow ownership is large. But with continued human population growth and increasing

competition for feed and water, this is not sustainable.

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Policy recommendation

2. Intervention to increase dairy productivity More researches on the sector; the current budget allocated to the

livestock sectors is relatively very low.Encourage adoption of foreign breeds and hybrids

3. Intervention to increase dairy market development Introduction of technologies for reducing perishability and

health risks of milk productsEncouraging establishment of milk cooperatives and

monitoring the quality of their products.

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Policy recommendation

Investments in improving dairy production and value chains may be a “win-win” proposition:Providing higher incomes to producersMaking milk more widely available for consumption by

pre-school children

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Thank you!