THE ECONOMIC IMPACT OF HIV/AIDS IN SMALLHOLDER FARMERS OF ALAMATA DISTRICT, SOUTHERN TIGRAY, ETHIOPIA.
By
Gebrehiwot Hailemariam, Belay Kassa and Robert Baars
ABSTRACT

The starting point for the design of effective programs to mitigate the impact of HIV/AIDS depends on the availability of accurate information on how households are affected by and respond to the pandemic. Hence, this study was initiated with the aim of quantifying productive labor loss, identifying existing coping mechanisms to mitigate the shock and estimating foregone crop grain yield due to HIV/AIDS. The study was carried out in Alamata district and data were collected from a total of 120 farm households (40 affected and 80 non-affected households). Effective labor supply and coping mechanisms were analyzed using descriptive analysis. Econometric tools, namely Cobb-Douglas (CD) production function and decomposition models, were used to quantify crop yield forgone due to HIV/AIDS and to decompose the yield difference between the two groups of households.

The results of this study indicated that HIV/AIDS reduced the affected households’ effective labor supply by about 42 percent as compared to that of the non-affected households. The effect of reduced labor supply was reflected on the household composition and dependency ratio of affected households. Moreover, the study highlighted that HIV/AIDS resulted in the reduction of total cultivated land and total livestock holding. Besides the labor shortage, change in total cultivated land and reduction in livestock holding of households, HIV/AIDS depleted the financial resources of households in that they were forced to spend money on medical and funeral expenses. The participation in and access to extension and training programs and credit facilities by affected households were also very limited as compared to that of the non-affected households.

In response to the shocks of HIV/AIDS, affected households adopted different strategies, such as labour sharing arrangements, oxen sharing, share cropping, use of pack animals as a source of draft power, forcing children to dropout of school, changing the types of crops and crop varieties grown, reduction in land size and sale of assets.

Estimation of the CD production functions showed that the value of crop grain yield of affected households were lower, by about 73 percent, than that of the non-affected ones. The yield difference between the two groups of households was due to both technological and input use differences. Technological change and input use differences accounted respectively for about 13 percent and 60 percent of the difference in income from crop production between the two groups of households.

Therefore, to mitigate the impact of HIV/AIDS, location specific programs should be designed to strengthen the capacity of rural households by improving their access to the limited resources, promoting labor/capital-saving technologies and developing technologies that can make optimal use of limited resources.