Assessing the effectiveness of drought anticipatory action in Uganda’s agro-pastoral drylands: a cost-benefit analysis

Droughts inherently disrupt economies, reverse development gains, and cause welfare losses. These impacts are more pronounced in climate-sensitive economies and drylands, where their frequency and intensity have increased due to climate change. Anticipatory Action (AA), a new practice based on climate early warning systems, has the potential to mitigate these impacts. However, quantitative insights into the costs and benefits of these AA interventions in Uganda’s drylands are lacking, making it difficult to support public investment aimed at protecting development gains and reducing welfare losses due to droughts. Therefore, the objective of this study was to conduct an ex-ante cost-benefit analysis of commonly proposed AA interventions, particularly drought-tolerant seeds and livestock vaccination, in the Napak and Moroto districts of the Karamoja region in Uganda. Given the stochastic behaviour of drought, a stochastic benefit-cost models were set up in XLrisk for Excel over a 20-year horizon. These were developed to assess whether the benefits of implementing the two anticipatory interventions based on a drought return period of five years would outweigh the cost. Data were collated from the government of the Uganda Bureau of Statistics, Ministry of Agriculture Animal Resources and Fisheries (MAAIF), and the relevant literature. On average, the Net Present Value (NPV) for drought-tolerant sorghum seeds was negative, whereas the Foot and Mouth Disease (FMD) anticipatory vaccination yielded positive values, even when indirect benefits were excluded. The benefit-cost ratio (BCR) for the sorghum seed intervention was below one in the baseline model with mean of 0.75 and (min =0.4 and max= 1.35), and improved to a mean of 1.30, (min 0.77and max 2.12) when indirect benefits were included. In contrast, the FMD vaccination model exhibited a BCR of 1.44 when considering direct avoided production losses, excluding potential benefits from averted trade losses and outbreak control costs. Sensitivity and correlation analyses indicated that vaccination costs had the most significant negative impact on the NPV of the FMD vaccination model, whereas training costs had similar effects on the drought-tolerant seed model. Overall, the evaluated AA interventions produced mixed NPVs with wide ranges that included negative values during simulations. However, the proposed AA interventions for Karamoja appear to be more cost-effective when focused on protecting livestock livelihoods than crop livelihoods. Crop interventions can yield greater benefits if the autonomous adoption of these measures is promoted through increased awareness and improved access to affordable seeds.