early stages of the use of harmful coping strategies by farmers (three to eight months following the main harvesting season), and prior to the phase where live-saving interventions become necessary (nine to eleven months following the main harvesting season). Moreover, seasonal monitoring data are available earlier than LEAP and LIAS data, enabling the detection of a failed start of a season, as well as rainfall deficits prior to the final phase of crop development. Jointly, monitoring and early warning data could therefore enable a timely drought response<sup>59</sup> . In contrast, interventions through HRD appeals are typically associated with time delays as funds are raised, leading to response interventions during the time where coping strategies are near their exhaustion and emergency assistance is required (eight to eleven months following the main harvesting season). The timing of HRD appeal funding makes the HRD process particularly well-suited to addressing emergency needs that may arise when PSNP FCB funds are exhausted early.

# V.2 The welfare benefits of a timely drought response

The impacts of droughts on household welfare have been studied in the academic literature. In particular, a body of research in Ethiopia has demonstrated that droughts have significant adverse impacts on household consumption and may cause households to lose valuable productive assets. Droughts also negatively affect farmers’ health, leading to a higher incidence of morbidity caused by the development of a range of diseases.

Investigating the impacts of droughts on household consumption, Dercon, Hoddinott and Woldehanna (2005) show that experiencing a drought at least once in the previous five years lowers per capita consumption by 20%. Moreover, the authors show that 41% of households lose productive assets and 77% of households experience a loss of income and consumption as a result of droughts. In a similar spirit, Yamano, Alderman and Christiaensen (2005) showed that crop losses associated with droughts result in reduced consumption, affecting the growth of Ethiopian children particularly in the 6-24 months age group. Estimates suggest a 50% crop loss results in a reduction of 9 mm of height over six months. A recent study by Devarajan et al. (2013) shows that a severe drought in Ethiopia would cause an immediate reduction in consumption of 6 percentage points. The authors show also that droughts may lead to significant increases in food prices, which may further jeopardize farmers’ ability to secure their food needs.

A late response to droughts will imply a greater need for providing food assistance. This link has been studied by Alemu et al. (2008), who find that in Ethiopia, grain storage will decline following the main _meher_ harvesting season. In particular, on average grain storage of the median farmer in Ethiopia will last up to seven months following the _meher_ harvest, with a decreasing proportion of all farming households having grain in storage as the season progresses (Clarke and Hill, 2012). As illustrated in Figure 6, the duration of the stocks depends on farm size, with just 35% of the stocks of small farmers lasting six months, while more than 60% of the stocks of large farms did. After ten or eleven months following the _meher_ harvest, the proportion of farms that hold grain storage is low for all farm sizes.

> 59 A timely drought response is key not only due to food insecurity, but also due to non-food needs. In particular, in a severe drought, water, and health become more important as the food security outcomes tend to be more severe. These sectors often have less capacity and are more costly per person.  Timely intervention is therefore key to enable a comprehensive drought response in both the food and non-food sectors.

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