Diversification Strategies and Adaptation Deficit: Evidence from Rural Communities in Niger

The paper provides fresh empirical evidence on the adaptation process in Niger rural communities using original longitudinal socio-economic panel data merged with granular geo-referenced climatic information. We identify the main drivers and impacts of crop and labor diversification which constitute two livelihood strategies on moderating the adaptation deficit. In doing so, we account for the interdependence between the two diversification practices and potential reverse causality between welfare outcomes and diversification behavior. Moreover, we condition the impacts of diversification on different sections of the welfare distribution to capture potential non-linear effects. Our results reveal that the diversification has positive and significant welfare impacts when most vulnerable households rely on it as an adaptation strategy to mid-run climate variability and as a coping strategy to short-run market shocks. At the same time, our results find lower but still positive impacts for well-endowed households that are likely to diversify their activity portfolio. Given the very limited presence of policy support, we conclude that the rural Nigerien communities are characterized by a large and autonomous adaptation response which constitutes a key leverage mechanism for policy makers. We thus suggest government interventions aimed at supporting the most important diversification drivers, but also aimed at straightening some channels, such as network infrastructures or the promotion of local crop varieties, which may have a greater potential in triggering diversification.