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Assessing the Effects of Hazards and Interventions on Farm Household Liquidity in Sudan ‐ A Preliminary Accounting Model
Author(s) -
Bright Geoff
Publication year - 1999
Publication title -
journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.157
H-Index - 61
eISSN - 1477-9552
pISSN - 0021-857X
DOI - 10.1111/j.1477-9552.1999.tb00796.x
Subject(s) - solvency , market liquidity , asset (computer security) , debt , precautionary savings , psychological intervention , cash , business , work (physics) , economics , finance , mechanical engineering , psychology , computer security , psychiatry , computer science , engineering
The informed assessment of the effects of hazards on farm households and the design of appropriate interventions requires a knowledge of the pattern of household cash and asset stocks and flows. This paper uses the example of a poor farm household in Kordofan, Sudan to build a debt/savings model and then study the effects of environmental “shocks” and different forms of interventions. The results suggest that, in the absence of external injection in the form of technological improvement or worker remittances, over the period 1988–1992, households would have descended into a debt spiral, even with formal credit. With income improvements solvency would have only been ensured if formal credit had been available. Although more work needs to be done to increase the validity of such “accounting” models of farm household liquidity, this study has established a methodology which can be improved upon and applied elsewhere.