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Climate change and agriculture

agriculture and climate change

This World Bank research has focused on how agriculture can adapt under pressure from climate change conditions.

Contact: Mike Toman, mtoman@worldbank.org

 

 Research focus  |  Researchers |  Related research  |  Research outputs   

The World Bank has conducted several economic assessments of the impact of climate change on agriculture and how agriculture can adapt under a variety of conditions. The studies examined 22 countries across four continents and included both developed and developing economies. 

 
Adaptation to climate change - Africa

Policy interventions to address climate change in agriculture in Africa need to take account of the heterogeneity of farming systems. The physical conditions facing farmers in various locations and their (economic and institutional) ability to implement various adaptation measures are different, and therefore blanket policies may create inequities and not be efficient. The analysis takes advantage of existing information dividing the African continent into Agro-Ecological Zones (AEZs), a well-known delineation of agricultural production conditions.

This study provides a range of estimated climate impacts to various farm types across AEZ’s in Africa, and estimates the benefits from, and (if possible), the cost of policy interventions that would allow farmers to adapt to climate change.

Farmers make different choices in different climates.  The studies found that decisions by farmers to switch to plant crops, livestock, or both crops and livestock, depends on the climate.  Farmers in places that are temperate and wet tend to raise crops.  Farmers in places that turn drier tend to raise livestock.  Farmers in places that turn hotter tend to raise both crops and livestock.

Another choice that depends on climate is irrigation.  Farmers are more likely to choose and rely on irrigation, where water is available, if their farm is in a cool and dry location.  The results provide strong evidence that farmers will make adjustments in how they grow crops and raise livestock in order to cope with global warming, depending on public policies that make such adjustments easier or difficult.

 
Impacts of climate change on agriculture - China, Africa, South America
 

China 

Several studies addressing the supply and demand for food in China suggest that the nation can largely meet its needs in the coming decades. However, these studies do not consider the effects of climate change. This research examines whether near future expected changes in climate are likely to alter this picture.

 

Africa and South America

A continent-wide impact (both in Africa and South America) of various uniform scenarios of likely change in temperature and precipitation is quite substantial.  It is estimated that by the year 2100, per hectare net income of farmers would be reduced by up to 25% in Africa and up to 66% in South America depending on the climate change scenario and Global Climate Model used.

As can be expected, rainfed areas are much more vulnerable than irrigated areas.  The impacts of warming, however, vary a great deal across the landscape.  Some areas are especially hard hit and some areas may benefit, depending on the climate scenario, the existing land cover, production practices, and the present climate in each location.

Small and large farms face different impacts in Africa, but very similar impacts in South America, due to differences in cropping patterns and technologies.  Warming will cause relatively bigger losses in net income to large farmers compared with the loss to small farmers in Africa, but about the same percentage loss in land value and net income for both small and large farms in South America. (Big and small have different scales in South America and Africa.)

 
 Researchers
  • Ariel Dinar (University of California, Riverside)
  • Robert Mendelsohn (Yale University)
 
 Related research

 Research outputs
 

Climate and Agriculture: An Economic Analysis of Global Impacts, Adaptation and Distributional Effects, (2009)
This book examines the impact of climate on agriculture and how agriculture can adapt under a variety of conditions for 22 countries across four continents, including both developed and developing economies. It provides both a good analytical basis for additional work and solid results for policy debate concerning abatement, adaptation, and equity (income distributional effects).

 

"Macro-Micro Feedback Links of Irrigation Water Management in Turkey," E.H. Cakmak, H. Dudu, S. Saracoglu, X. Diao, T. Roe, and Y. Tsur, World Bank Policy Research Working Paper 4781, 2008.

In Turkey over on-half of agricultural production relies on irrigation. Irrigated agriculture consumes about 75 percent of total water used, which is about 30 percent of renewable water availability. This study analyzes the likely effects of increased competition for water resources and changes in the Turkish economy. The analysis uses an economy-wide Walrasian Computable General Equilibrium model with a detailed account of the agricultural sector. The study investigated the economy-wide effects of two external shocks, namely a permanent increase in the world prices of agricultural commodities and climate change, along with the impact of the domestic reallocation of water between agricultural and non-agricultural uses. It was also recognized that because of spatial heterogeneity of the climate, the simulated scenarios have differential impact on the agricultural production and hence on the allocation of factors of production including water. The greatest effects on major macroeconomic indicators occur in the climate change simulations. As a result of the transfer of water from rural to urban areas, overall production of all crops declines. Although production on rainfed land increases, production on irrigated land declines, most notably the production of maize and fruits. The decrease in agricultural production, coupled with the domestic price increase, is further reflected in net trade. Agricultural imports increase with a greater decline in agricultural exports.

 

"Macro-micro feedback links of water management in South Africa: CGE analyses of selected policy regimes," R. Hassan, J. Thurlow, T. Roe, X. Diao, S. Chumi, and Y. Tsur, World Bank Policy Research Working Paper 4768, 2008. 

The pressure on an already stressed water situation in South Africa is predicted to increase significantly under climate change, plans for large industrial expansion, observed rapid urbanization, and government programs to provide access to water to millions of previously excluded people. This study employed a general equilibrium approach to examine the economy-wide impacts of selected macro and water related policy reforms on water use and allocation, rural livelihoods, and the economy at large. The analyses reveal that implicit crop-level water quotas reduce the amount of irrigated land allocated to higher-value horticultural crops and create higher shadow rents for production of lower-value, water-intensive field crops, such as sugarcane and fodder. Accordingly, liberalizing local water allocation in irrigation agriculture is found to work in favor of higher-value crops, and expand agricultural production and exports and farm employment. Allowing for water trade between irrigation and non-agricultural uses fueled by higher competition for water from industrial expansion and urbanization leads to greater water shadow prices for irrigation water with reduced income and employment benefits to rural households and higher gains for non-agricultural households. The analyses show difficult tradeoffs between general economic gains and higher water prices, making irrigation subsidies difficult to justify.

 

"How China’s Farmers Adapt to Climate Change," J. Wang, R. Mendelsohn, A. Dinar, and J. Huang, World Bank Policy Research Working Paper 4758, 2008.

This paper uses a cross sectional method to analyze irrigation choice and crop choice across 8,405 farmers in 28 provinces in China. The findings show that Chinese farmers are more likely to irrigate when facing lower temperatures and less precipitation. Farmers in warmer places are more likely to choose oil crops, maize, and especially cotton and wheat, and are less likely to choose vegetables, potatoes, sugar, and especially rice and soybeans. In wetter locations, farmers are more likely to choose soybeans, oil crops, sugar, vegetables, cotton, and especially rice, and they are less likely to choose potatoes, wheat, and especially maize.The analysis of how Chinese farmers have adapted to current climate, provides insight into how they will likely adapt when climate changes. Future climate scenarios will cause farmers in China to want to reduce irrigation and shift toward oil crops, wheat, and especially cotton. In turn, farmers will shift away from potatoes, rice, vegetables, and soybeans. However, adaptation will likely vary greatly from region to region. Policy makers should anticipate that adaptation is important, that the magnitude of changes depends on the climate scenario, and that the desired changes depend on the location of each farm.

 

"How Will Climate Change Shift Agro-Ecological Zones and Impact African Agriculture?" P. Kurukulasuriya and R. Mendelsohn, World Bank Policy Research Working Paper 4717, 2008.

The study develops a new method to measure the impacts of climate change on agriculture called the Agro-Ecological Zone (AEZ) Model. A multinomial logit is estimated to predict the probability of each AEZ in each district. The average percentage of cropland and average crop net revenue are calculated for each AEZ. Then an estimate of the amount of cropland in Africa and where it is located is provided. Using current conditions, the model calculates baseline values of cropland and crop net revenue, and estimates the future impact of climate change using two scenarios-harsh and mild. Total cropland does not change much across the two climate scenarios. However, the predicted change in African crop revenue ranges from a loss of 14 percent in the mild climate scenario to 30 percent in the harsher climate scenario. The analysis reveals that the greatest harm from climate change is that it will shift farms from high to low productive AEZs. The approach not only identifies the aggregate impacts, but also indicates where the impacts occur across Africa. The central region of Africa is hurt the most, especially in the harsher climate scenario. The Agro-Ecological Zone Model is a promising new method for valuing the long-term impacts of climate change on agriculture.

 

"A Structural Ricardian Analysis of Climate Change Impacts and Adaptations in African Agriculture," S. N. Seo, R. MendelsohnWorld Bank Policy Research Working Paper 4603, 2008.

This paper develops a Structural Ricardian model to measure climate change impacts that explicitly models the choice of farm type in African agriculture. This two stage model first estimates the type of farm chosen and then the conditional incomes of each farm type after removing selection biases. The results indicate that increases in temperature encourage farmers to adopt mixed farming and avoid specialized farms such as crop-only or livestock-only farms. Increases in precipitation encourage farmers to shift from irrigated to rainfed crops. As temperatures increase, farm incomes from crop-only farms or livestock-only farms fall whereas incomes from mixed farms increase. With precipitation increases, farm incomes from irrigated farms fall whereas incomes from rainfed farms increase.  Naturally, the Structural Ricardian model predicts much smaller impacts than a model that holds farm type fixed. With a hot dry climate scenario, the Structural Ricardian model predicts that farm income will fall 50 percent but the fixed farm type model predicts farm incomes will fall 75 percent.

 

"Long-Term Adaptation: Selecting Farm Types Across Agro-Ecological Zones in Africa," S. N. Seo, R. Mendelsohn, A. Dinar, Pradeep Kurukulasuriya, Rashid Hassan World Bank Policy Research Working Paper 4602, 2008.

Using economic data from more than 8,500 household surveys across 10 African countries, this paper examines whether the choice of farm type depends on the climate and agro-ecological zone of each farm. The paper also studies how farm type choice varies across farmers in each zone, using a multinomial logit choice model. Farmers are observed to choose from one of the following five types of farms: rainfed crop-only, irrigated crop-only, mixed rainfed (crop and livestock), mixed irrigated, and livestock-only farming. The authors compare current decisions against future decisions as if the only change were climate change. They focus on two climate scenarios from existing climate models: the Canadian Climate Centre scenario, which is hot and dry, and the Parallel Climate Model scenario, which is mild and wet.  The results indicate that the change in farm types varies dramatically by climate scenario but also by agro-ecological zone. Policy makers must be careful to encourage the appropriate suite of measures to promote the most adapted farm type to each location.

 

"Differential adaptation strategies by agro-ecological zones in African livestock management," S. N. Seo, R. Mendelsohn, A. Dinar, P. Kurukulasuriya, Policy Research Working Paper 4601, 2008.

This paper examines how farmers have adapted their livestock operation to the current climate in each agro-ecological zone in Africa. The authors examine how climate has affected the farmer's choice to raise livestock or not and the choice of animal species. To measure adaptation, the analysis regresses the farmer's choice on climate, soil, water flow, and socio-economic variables. The findings show that climate does in fact affect the farmer's decision about whether to raise livestock and the species. The paper also simulates how future climates may alter these decisions using forecasts from climate models and the estimated model.  With a hot dry scenario, livestock ownership will increase slightly across all of Africa, but especially in West Africa and high elevation agro-ecological zones. Dairy cattle will decrease in semi-arid regions, sheep will increase in the lowlands, and chickens will increase at high elevations. With a mild and wet scenario, however, livestock adoption will fall dramatically in lowland and high latitude moist agro-ecological zones. Beef cattle will increase and sheep will fall in dry zones, dairy cattle will fall precipitously and goats will rise in moist zones, and chickens will increase at high elevations but fall at mid elevations. Livestock adaptations depend on the climate scenario and will vary across the landscape. Agro-ecological zones are a useful way to capture how these changes differ from place to place.

"Differential Adaptation Strategies to Climate Change in African Cropland by Agro-Ecological Zones," S. N. Seo, R. Mendelsohn, P. Kurukulasuriya, A. Dinar and R. Hassan, World Bank Policy Research Working Paper 4600, 2008.

This paper quantifies how African farmers have adapted their crop and irrigation decisions to their farm's current agro-ecological zone. The results indicate that farmers carefully consider the climate and other conditions of their farm when making these choices. These results are then used to forecast how farmers might change their irrigation and crop choice decisions if climate changes.  The model predicts African farmers would adopt irrigation more often under a very hot and dry climate scenario but less often with a mild and wet scenario. However, farms in the deserts, lowland humid forest, or mid elevation humid forest would reduce irrigation even in the very hot and dry climate scenario. Area under fruits and vegetables would increase Africa-wide with the very hot and dry climate scenario, except in the lowland semi-arid agro-ecological zone. Millet would increase overall under the mild and wet scenario, but decline substantially in the lowland dry savannah and lowland semi-arid agro-ecological zones. Maize would be chosen less often across all the agro-ecological zones under both climate scenarios. Wheat would decrease across Africa. The authors recommend that care must be taken to match adaptations to local conditions because the optimal adaptation would depend on the agro-ecological zone and the climate scenario.

 

"A Ricardian Analysis of the Distribution of Climate Change Impacts on Agriculture across Agro-Ecological Zones in Africa," S. N. Seo, R. Mendlesohn, A. Dinar, R. Hassan, P. Kurukulasuriya, World Bank Policy Research Working Paper 4599, 2008.

This paper examines the distribution of climate change impacts across the 16 agro-ecological zones in Africa using data from the Food and Agriculture Organization combined with economic survey data from a Global Environment Facility/World Bank project. Net revenue per hectare of cropland is regressed on a set of climate, soil, and socio-economic variables using different econometric specifications "with" and "without" country fixed effects. Country fixed effects slightly reduce predicted future climate related damage to agriculture. With a mild climate scenario, African farmers gain income from climate change; with a more severe scenario, they lose income. Some locations are more affected than others. The analysis of agro-ecological zones implies that the effects of climate change will vary across Africa. For example, currently productive areas such as dry/moist savannah are more vulnerable to climate change while currently less productive agricultural zones such as humid forest or sub-humid zones become more productive in the future. The agro-ecological zone classification can help explain the variation of impacts across the landscape.

 

"Can China Continue Feeding Itself? The Impact of Climate Change on Agriculture," J. Wang, R. Mendelsohn, A. Dinar, J. Huang, S. Rozelle , L. Zhang, World Bank Policy Research Working Paper 4470, 2008.

Several studies addressing the supply and demand for food in China suggest that the nation can largely meet its needs in the coming decades. However, these studies do not consider the effects of climate change. This paper examines whether near future expected changes in climate are likely to alter this picture. The authors analyze the effect of temperature and precipitation on net crop revenues using a cross section consisting of both rainfed and irrigated farms. Based on survey data from 8,405 households across 28 provinces, the results of the Ricardian analysis demonstrate that global warming is likely to be harmful to China, but the impacts are likely to be very different in each region. The mid latitude region of China may benefit from warming but the southern and northern regions are likely to be damaged by warming. More precipitation is beneficial to Chinese farmers except in the wet southeast. Irrigated and rainfed farmers have similar responses to precipitation but not to temperature. Warmer temperatures may benefit irrigated farms but they are likely to harm rainfed farms.Finally, seasonal effects vary and are offsetting. Although the authors were able to measure the direct effect of precipitation and temperature, they could not capture the effects of change in water flow which will be very important in China. Can China continue feeding itself if climate changes? Based on the empirical results, the likely gains realized by some farmers will nearly offset the losses that will occur to other farmers in China. If future climate scenarios lead to significant reductions in water, there may be large damages not addressed in this study.

 

"Endogenous Irrigation: The Impact of Climate Change on Farmers in Africa," P. Kurukulasuriya and R. Mendelsohn, World Bank Policy Research Working Paper 4278, 2007.

The authors examine how climate affects the decision by farmers to use irrigation and then how climate affects the net revenues of dryland and irrigated land. This Ricardian "selection" model, using a modified Heckman model, is then estimated across 8,400 farmers in Africa. The analysis explicitly models irrigation but controls for the endogeneity of irrigation. The authors find that the choice of irrigation is sensitive to both temperature and precipitation. Simulations of the welfare impacts of several climate scenarios demonstrate that a model which assumes irrigation is exogenous provides a biased estimate of the welfare effects of climate change. If dryland and irrigation are to be estimated separately in the Ricardian model, irrigation must be modeled endogenously. The results also indicate that African agriculture is sensitive to climate change. Many farmers in Africa will experience net revenue losses from warming. Irrigated farms, on the other hand, are more resilient to temperature change and, on the margin, are likely to realize slight gains in productivity. But any reduction in precipitation will be especially deleterious to dryland farmers, generally the poorest segment of the agriculture community. The results indicate that irrigation is an effective adaptation against loss of rainfall and higher temperatures provided there is sufficient water available. This will be an effective remedy in select regions of Africa with water. However, for many regions there is no available surface water, so that warming scenarios with reduced rainfall are particularly deleterious.

 

"Changing Farm Types and Irrigation as an Adaptation to Climate Change in Latin American Agriculture," R. Mendelsohn and S. N. Seo, World Bank Policy Research Working Paper 4161, 2007.

This paper models a farm that treats the choice of crops, livestock, and irrigation as endogenous. The model is composed of a multinomial choice of farm type, a binomial choice of irrigation, and a set of conditional land value functions. The model is estimated across over 2,000 farmers in seven Latin America countries. The results quantify how farmers adapt their choice of farm type and irrigation to their local climate. The results should help governments develop effective adaptation policies in response to climate change and improve the forecasting of climate effects. The paper compares the predicted effects of climate change using both endogenous and exogenous models of farm choice.

 

"An analysis of crop choice: adapting to climate change in Latin American farms," S. N. Seo and Robert Mendelsohn, World Bank Policy Research Working Paper 4162, 2007.

The paper explores how Latin American farmers adapt to climate by changing crops. They develop a multinomial choice model of farmer's choice of crops. Estimating the model across over 2,000 farmers in seven countries, they find that both temperature and precipitation affects the crops that Latin American farmers choose. Farmers choose fruits and vegetables in warmer locations and wheat and potatoes in cooler locations. Farms in wetter locations are more likely to grow rice, fruits, and squash, and in dryer locations maize and potatoes. Global warming will cause Latin American farmers to switch away from wheat and potatoes toward fruits and vegetables. Predictions of the impact of climate change must reflect not only changes in yields or net revenues per crop but also crop switching.

 

"A Ricardian analysis of the impact of climate change on Latin American farms," S. N. Seo and Robert Mendelsohn, World Bank Policy Research Working Paper 4163, 2007.

This study estimates the vulnerability of Latin American agriculture to climate change using a Ricardian analysis of both land values and net revenues. Examining a sample of over 2,500 farms in seven countries, the results indicate both land value and net revenue are sensitive to climate. Both small farms and large farms have a hill-shaped relationship with temperature. Estimating separate regressions for dryland and irrigated farms reveals that dryland farms are more sensitive to temperature but irrigated farms are more sensitive to precipitation. Examining the effects from future climate change scenarios reveals that severe scenarios could reduce farm earnings by as much as 62 percent by 2100, whereas more moderate scenarios could reduce earnings by about 15 percent. Small and large farms are equally sensitive to global warming. Land value and net revenue analyses produce quite similar results.

 

"An analysis of livestock choice : adapting to climate change in Latin American farms," S. N. Seo and R. Mendelsohn, World Bank Policy Research Working Paper 4164, 2007.

The paper explores how Latin American livestock farmers adapt to climate by switching species. They develop a multinomial choice model of farmer's choice of livestock species. Estimating the models across over 1,200 livestock farmers in seven countries, they find that both temperature and precipitation affect the species Latin American farmers choose. The authors then use this model to predict how future climate scenarios would affect species choice. Global warming will cause farmers to switch to beef cattle at the expense of dairy cattle.

 

"Will African Agriculture Survive Climate Change?" Kurukulasuriya P., R. Mendelsohn, R. Hassan, J. Benhin, T. Deressa, M. Diop, H. Mohamed Eid, K.Yerfi Fosu, G. Gbetibouo, S. Jain, A. Mahamadou, R. Mano, J. Kabubo-Mariara, S. El-Marsafawy, E. Molua, S. Ouda, M. Ouedraogo, I. Sène, D. Maddison, S. Niggol Seo, and Ariel Dinar, World Bank Economic Review 20(3):367-88, 2006.

Measurement of the likely magnitude of the economic impact of climate change on African
agriculture has been a challenge. Using data from a survey of more than 9,000 farmers across
11 African countries, a cross-sectional approach estimates how farm net revenues are
affected by climate change compared with current mean temperature. Revenues fall with
warming for dryland crops (temperature elasticity of –1.9) and livestock (–5.4), whereas
revenues rise for irrigated crops (elasticity of 0.5), which are located in relatively cool parts
of Africa and are buffered by irrigation from the effects of warming. At first, warming has
little net aggregate effect as the gains for irrigated crops offset the losses for dryland crops
and livestock. Warming, however, will likely reduce dryland farm income immediately.
The final effects will also depend on changes in precipitation, because revenues from
all farmtypes increase with precipitation. Because irrigated farms are less sensitive to climate,
where water is available, irrigation is a practical adaptation to climate change in Africa


Last updated: 2009-10-22




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