Adaptation in Agriculture

Presentation Title

Capacity Building Programme on the Economics of AdaptationSupporting National/Sub-National Adaptation Planning and Action

Adaptation in Agriculture

Bangkok October 2012


As Climate Changes, How Should Agriculture Adjust?

• What adjustments by farmers increase farm net revenue (gross revenue minus costs) per hectare?

• Can markets facilitate climate adaptation?

• What policies by government lead to higher net revenues?


I. Adaptation Choices for Farmers

• Choose type of farm (crop, livestock, mixed)

• Choose type of crop

• Choose type of livestock

• Choose timing (planting, harvesting)

• Choose inputs (fertilizer, labor, capital, irrigation)


How Can Farm Adaptation Alternatives Be Evaluated?

• Ask farmers how to adapt to climate change– If they have not experienced climate change, not likely

they know what to do in advance– Farmers have poor sense of long term climate changes

• Ask farmers how they adapt to extreme events– Farmers have experienced extreme events and can tell

you how they have adapted• Model farms and predict optimal changes

– Some examples in US but little empirical work on farm models

• Examine choices by farmers in different climates – Propose this approach in Asia


Climate Affects Farm Type

• Crops and livestock have preferred climate conditions

• As climate changes, farm type can change

• In general, wetter climates support crops and drier climates support livestock

• Smaller farms tend to depend on both for robust revenue- larger farms tend to specialize

Change in Farm Type in Latin America by Climate Scenario

-15.00%

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

Climate scenario

Fre

qu

en

cy

Ch

an

ge

CropOnly

Rainfed

Crop OnlyIrrigated

MixedRainfed

MixedIrrigated

LivestockOnly

CCC

CCSR

PCM


Crop Choice as Adaptation

• Specific crops tend to have narrow temperature and precipitation ranges

• Exception is crops with many varieties (maize)

• As climate changes, particular crops have higher net revenue

• Evident in where crops are grown today

• Farmers will switch when profitable to do so


African Crops vs Temperature


African Crops vs Precipitation


Crop Choice Varies by Region and Climate Scenario

• Three future climate scenarios lead to different changes in crop choice in China

• Crop choice changes are different in each region of China

• Adaptations are local

Region/Scenario

Wheat Potato Sugar Maize

Northeast

PCM +10.0 +1.9 -4.7 +0.6

HADCM3 +0.9 +82.8 -22.2 -26.2

CCM2 +19.0 +48.9 -20.2 -21.9

Middle

PCM -1.2 -12.3 +3.9 -0.2

HADCM3 -6.9 +68.2 -16.1 -5.3

CCM2 +3.0 -13.6 +3.5 +2.1

Northwest

PCM +10.3 +27.1 -12.3 -17.1

HADCM3 -11.2 +79.3 -18.5 -22.5

CCM2 +21.8 +24.9 -13.1 -14.5

Change in Regional Crops in China by Climate Scenario


Choice of Livestock Species Also Is Climate Sensitive

• High valued beef cattle and dairy cattle prefer cooler temperatures and dry climates

• Sheep and goats more tolerant to heat and wetter climates

• High temperatures and wetness can combine to yield high disease risks

African Livestock vs Temperature


African Livestock vs Precipitation


Climate Affects Planting and Harvesting Dates

• Warmer temperatures allow both earlier planting and later harvesting by reducing frost risk

• Combined they lead to longer growing seasons

• Higher temperatures also lead to higher risks of mid season (summer) peaks

Warming and Planting

Planting date(days after January 1)

Change in Temperature

Warming and Growing Season

Length ofGrowing Season

Change in Temperature


Climate and Inputs

• Generally, it is more profitable to invest in more inputs (fertilizer, irrigation, capital, improved seeds) in more productive locations

• Since climate helps determine productivity, it affects optimal inputs

• See hill-shaped relationship between inputs and climate

• Warming leads to more inputs in a cool location and less inputs in a hot location.

Warming and Inputs

InputPer Ha

Temperature


II. Market Adaptations

• Global markets (trade) provide robustness by combining supply across countries

• Although local weather leads to wide fluctuations in local production, global prices are relatively stable

• Global prices are sensitive to global changes- recent price hikes due to more expensive energy and biofuels (mitigation actions)

Global Price Chart


III. Government Roles

• Support research and development– New varieties and breeds suitable for future

climate– New farm management techniques like green

revolution

• Invest in irrigation supply– Irrigated farms less climate sensitive provided

adequate water

• Strengthen private responsibility on farmland• Weather insurance?


Common Property and Private Responsibility

• In absence of private responsibility, common property leads to underinvestment in land– Overgrazing grasslands– Inadequate investment in soil productivity

• Solution is to increase private responsibility– Long term leases on land– Community ownership– Private ownership


Weather Insurance

• Weather insurance provides protection against climate variability (weather)– If premiums equal to expected risk, encourages

adaptation

• Subsidizing insurance increases farm incomes – Helpful to poor farmers

• Subsidized insurance removes incentive to adapt– Leads to mal-adaptation: risk taking– Increases climate damages

Adaptation in Agriculture

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