Export Commodity Dependence and Vulnerability to Poverty

In this paper we explore the link between commodity dependence and vulnerability topoverty in rural Tanzania with a particular focus on coffee-growing households. Even if thevulnerability rate is quite high in rural Tanzania, our results show, on average, that coffeegrowers have a lower probability of being poor and vulnerable compared to non-growers.However, when coffee growers are disaggregated into small and large, we see that the resultis mainly driven by large coffee growers. For small coffee growers, on the other hand,we do not find evidence to suggest that they are different from non-growers in terms ofboth poverty and vulnerability. When we disaggregate vulnerability into its components,poverty-induced vs risk-induced vulnerability, we find coffee growers to have a relativelyhigher probability of facing risk-induced vulnerability compared to non-growers. Thereare, however, heterogeneities in terms of the size of coffee growers. In particular, relative tonon-growers, small coffee growers have a relatively higher probability of facing risk-inducedvulnerability. On the other hand, conditional on being vulnerable, large coffee growers donot appear to have a statistically significant difference in their probability of facing a risk-induced vulnerability compared to non-coffee growers. These results indicate not only theneed for vulnerability-reducing policies but also the importance of identifying the source ofvulnerability as the choice of the right type of policy intervention depends on understandingthe causes of vulnerability.