Climate change and agriculture in nile basin of ethiopia


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Ethiopian Development Research Institute (EDRI) and International Food Policy Research Institute (IFPRI), Semiar series, January 12, 2011

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Climate change and agriculture in nile basin of ethiopia

  1. 1. Climate Change and Agriculture in Nile basin of Ethiopia: Measuring Economic Impacts and Adaptation Options Meseret Molla Kassahun
  2. 2. Assessment of the Economic Impacts of Climate Change on Crop Agriculture in Nile basin of Ethiopia, Ethiopia * Meseret Molla Kassahun and EDRI project Economic Impacts of Climate Change on the Livestock Revenues of Farmers in Nile basin of Ethiopia, Ethiopia EDRI Project   Empirical Economic Assessment Climate Change on the Revenues and Adaptation of Farmers in Nile basin of Ethiopia,Ethiopia EDRI Project Email: [email_address] , Cell-phone:+251911-863052
  3. 3. <ul><li>Motivation and objectives </li></ul><ul><li>Data </li></ul><ul><li>Methods </li></ul><ul><li>Basic descriptive results </li></ul><ul><li>Empirical results </li></ul><ul><li>Key findings </li></ul><ul><li>Conclusions and policy implications </li></ul>
  4. 4. <ul><li>The impacts of climate change are already observed in all sectors including the agriculture sector (IPCC,2007)-have vast social and environmental consequences in Ethiopia </li></ul><ul><li>The poorest countries and the most vulnerable citizens will suffer the earliest and most damaging effect (Kurukulasuriya and Rosenthal,2003). </li></ul><ul><li>Future climate prediction showed increasing temperature (b/n 0.5 and 3.6 during 2070, a 3.8 up on the 1960-90 average) and decreasing rainfall (average daily rainfall will reduce by 3.5%)- According to Ethiopia’s First National Communications to UNFCC(NAMA)-temperature increases drive other environmental changes ( the science ) </li></ul>
  5. 5. <ul><li>Limited disaster management skill , low level of economic and social development and weak institutional capacity of the country (Assefa,2008) </li></ul><ul><li>Thus, why and how climate change matter (climate change science) to Ethiopia’s crop agriculture and livestock production (empirics assessment) is very crucial to counteract the harmful impact of climate change. </li></ul><ul><li>Yet, the available few literatures on climate change impact on agriculture is not quite comprehensive particularly in terms of lack of economic assessment by considering climate, soil and socio-economic aspect of farmers </li></ul>
  6. 6. <ul><li>The objective of the study is to analyze the effects of long term climate change on agriculture and to identify the options for adaptations. Specifically, </li></ul><ul><li>to assess the extent of the relationship between agricultural income (from crop, Livestock and mixed agriculture separately) and climate variables. </li></ul><ul><li>to determine the marginal impact of temperature and precipitation on incomes obtained from crop, livestock, and mixed agriculture </li></ul><ul><li>to predict range of potential future impacts on crop, livestock, and mixed agriculture under uniform climate change scenarios and Atmospheric- Ocean General Circulation models (AOGCM) scenarios-specific scenarios for Ethiopia. </li></ul><ul><li>to identify choices for adaptation measures that farmers are using to mitigate potential impacts from expected changes in climatic conditions </li></ul>
  7. 7. <ul><li>The International Food Policy Research Institute (IFPRI) in collaboration with the Ethiopian Development Research Institute (EDRI) collected the data - cross-sectional household survey. </li></ul><ul><li>The household survey covered five regional states of Ethiopia, 20 districts, and 1,000 households . </li></ul><ul><li>Obtained historical rain fall and temperature data from 1951-2000-uses the climate data done by the thin plate spline method of spatial interpolation and imputes household-specific rainfall and temperature values using latitude, longitude, and elevation information for each household obtained from the survey. </li></ul>
  8. 8. Nile basin of Ethiopia
  9. 9. <ul><li>Descriptive statistics </li></ul><ul><li>a) perceptions on climate change </li></ul><ul><li>b) Adaptations to climate change </li></ul><ul><li>c) constraints to adaptation </li></ul><ul><li>Econometric Approach </li></ul><ul><li>Annual net revenue per hectare/farm is regressed on climate (temperature and rainfall), soils and socio-economic variables </li></ul><ul><li>Then the regression results are applied to possible future climates </li></ul><ul><li>Marginal impact analysis </li></ul><ul><li>Uniform climate change impact analysis </li></ul><ul><li>Atmosphere- Ocean Global Circulation Model (AOGCM) scenarios impact analysis </li></ul>
  10. 10. <ul><li>Uniform climate change scenarios (1.4-5.8degrecentigardde during the period 1990-2100) </li></ul><ul><li>2.5°C and 5°C increase in temperature & </li></ul><ul><li>7% and 14% decrease in rainfall (by Kurukulasuriya and Mendelsohn, 2006 and Deressa, 2006). </li></ul><ul><li>Atmosphere- Ocean Global Circulation Model (AOGCM)(for the year 2050 and 2100) </li></ul><ul><li>PCM (Parallel Climate Model), </li></ul><ul><li>HadCM3 (Hadley Centre Coupled Model), and </li></ul><ul><li>CGCM2 (Coupled General Circulation Model). </li></ul>
  11. 11. <ul><li>Source: Author’s Computation from data obtained from Strzepek and McCluskey (2007) and Deressa and Hassan (2009) </li></ul>Model Temperature change( 0 C) Current 2050 2100 PCM A2 scenarios 21.25 23.55 26.8 HadCM3 21.25 25.05 30.7 CGCM2 21.25 24.55 29.3 PCM B2 scenarios 21.25 23.55 25.3 HadCM3 21.25 25.05 28.0 CGCM2 21.25 24.15 26.4 Precipitation change (%) Current 2050 2100 CGCM2 A2&B2 scenarios 76.77 66.79 55.27 PCM 76.77 80.61 85.98 HadCM3 76.77 83.68 93.66
  12. 12. <ul><li>The Ricardian method is a cross-sectional approach to studying agricultural production. </li></ul><ul><li>It is based on land rent which is seen as the net revenue from the best use of land. </li></ul><ul><li>The land rent would reflect the net productivity of farm land. </li></ul><ul><li>Farm value (V) consequently reflects the present value of future net productivity. </li></ul><ul><li>The land rent per hectare to be equal to net revenue per hectare/farm is given by </li></ul>
  13. 13. <ul><li>Where P = price </li></ul><ul><li>Q=quantity produced of good I, W=factor prices, L=land per hectares, F=climate variables, Z=soil, G=socio-economic variable </li></ul><ul><li>K-=production inputs </li></ul><ul><li>E=environmental factors </li></ul><ul><li>C= cost of production </li></ul>The present value of the stream of current and future revenues gives the land values The standard Ricardian model relies on a quadratic formulation of climate and linear formulation of soils and socioeconomic variables
  14. 14. <ul><li>The marginal impact of climate variables ( fi) evaluated at the mean as follows: </li></ul><ul><li>The change in annual economic welfare (∆W) resulting from an environmental change from A to B which causes environmental inputs(E) to change from EA to EB given by (Kurukulasuriya and mendelsohn, 2006). </li></ul><ul><li>∆ W= W( EA)-W(EB)= </li></ul>
  15. 15. <ul><li>The model includes the physical variables (temperature, precipitation and soils) and socio-economic variables as independent variables and crop net revenue per hectare (crop agriculture), livestock net revenue per farm (livestock agriculture/production and farm net revenue per farm (mixed one) as dependent variable and estimated separately </li></ul><ul><li>Each of these models based on 975, 931 and 975 observation/household respectively. </li></ul>
  16. 16. <ul><li>Impact of outliers (unusual and influential data) </li></ul><ul><li>Monthly climate variables ( temperature and precipitation) are highly correlated </li></ul><ul><li>Heteroscedasticity </li></ul><ul><li>Endogeneity </li></ul>
  17. 17. <ul><li>A total of 25, 69 and 25 households believed to be outliers for various reasons were omitted for the three estimated models. </li></ul><ul><li>Centering, chi-square tests for independence and VIF </li></ul><ul><li>White’s general heteroscedasticity test. </li></ul><ul><li>Estimating a reduced form crop net revenue model rather than a structural model. </li></ul>
  18. 18. <ul><li>a. Perceptions </li></ul><ul><li>Adaptation to perceived changes & limiting factor on adapting </li></ul>Number Directions Temperature (%) Precipitation (%) 1 Increase 67 18 2 Decrease 4 62 3 Same 29 20 Adaptation Methods % factor % No adaptation method 42 Lack of information 43 Planting tree 21 Lack of money 22 Soil conservations 15 Shortage of labor 16 Different crop varieties 13 Shortage of land 11 Early and late planting 5 Poor potential for irrigation 8 Irrigation 4
  19. 19. <ul><li>Both linear and squared terms are significant in certain seasons, implying that climate has a nonlinear effect on net revenues ( RICARDIAN ESTIMATION FOR THE THREE MODELS.doc ). </li></ul><ul><li>The effect of quadratic seasonal climate variables on net revenues are not obviously determined by looking at the coefficients, as both the linear and the squared terms play a role (Kurukulasuriya & Mendelsohn, 2006). </li></ul><ul><li>In order to interpret the climate coefficients, the marginal effects of climate variables are estimated </li></ul>
  20. 20. <ul><li>Important observation </li></ul><ul><li>Increased temperature and decreased rainfall are the principal perceptions of the selected farmers in Nile basin of Ethiopia, </li></ul><ul><li>Selected households act in response to more rainfall than temperature, </li></ul><ul><li>Few farmers have adjusted farming to perceived climate changes, </li></ul><ul><li>Lack of information and money is the key limiting factor on adapting </li></ul>
  21. 21. <ul><li>Note: * Significant at 10% level ** Significant at 5% level *** Significant at 1% level </li></ul>Climate variables Crop Livestock Mixed Temperature -3127.91* 142.4 694.84 Summer -3013.45* -214.20* -118.41** Winter -3641.00** 228.58*** -665.11*** Spring 2993.45** 40.02 225.23 Fall 533 88 1253.13** Precipitation 147.53** -47.01 -305.13 Summer 8.63 -0.06 -57.59 Winter -102.77*** 134.21*** -354.80* Spring 212.33*** -181.13* 195.06* Fall 29.34 -0.02 -87.8
  22. 22. <ul><li>Author’s computation </li></ul>Scenarios Crop Livestock Mixed +2.5 temperature -1781.67 -236.94 -1888..08 Change net revenue       +5 temperature -2008.8 -431.75 -2040.41 Change net revenue   -7% precipitation       Change net revenue -2148.51 -80.35 -2614.86 -14 % in precipitation   Change net revenue -2235.75 -197.16 -2824.85
  23. 23. Temperature effect Precipitation effect Model Year Crop livestock Mixed Crop Livestock Mixed Change (%) A2 Scenarios PCM 2050 -79% -34% -97% -103% -156% -107%   2100 -119% -191% -133% -111% -528% -124% HadCM3 2050 -95% -98% -113% -105% -186% -111%   2100 -130% -210% -144% -111% -601% -128% CGCM2 2050 -89% -84% -108% -96% -60% -96%   2100 -127% -202% -141% -105% -310% -112% B2 Scenarios PCM 2050 -79% -34% -97% -103% -156% -107%   2100 -112% -183% -127% -111% -528% -124% HadCM3 2050 -95% -98% -113% -105% -186% -111%   2100 -124% -195% -138% -111% -601% -128% CGCM2 2050 -80% -68% -98% -96% -60% -96%   2100 -114% -190% -129% -105% -310% -112%
  24. 24. <ul><li>The descriptive statistics , the impact of marginal, uniform and specific climate scenarios for Ethiopia more or less shows the magnitude and direction of climate change impact on crop, livestock and agricultural production </li></ul><ul><li>Estimated marginal climate of the climate variables on crop/livestock/farm net revenue per hectare/farm indicate different results for temperature and precipitation and also for crop, livestock and mixed agriculture. </li></ul><ul><li>An increase in temperature (PCM, HadCM2 and CGM2), & precipitation (HadCM2 and PCM) and decreasing precipitation (CGCM2) will also reduce incomes obtained from crop, livestock and mixed agriculture for 2050 and 2100. So do for uniform climate scenarios (increasing temperature and decreasing rainfall) </li></ul><ul><li>But there is the possibility that adaptation can reduce these negative effects!!! </li></ul>
  25. 25. <ul><li>Crop Agriculture </li></ul><ul><li>Increasing new crops that are more appropriate to hot and dry conditions </li></ul><ul><li>encouraging profitable micro-irrigation systems, </li></ul><ul><li>Providing metrological information for farmers and disseminate climate change study results </li></ul><ul><li>suitable access to credit . </li></ul><ul><li>Livestock agriculture </li></ul><ul><li>developing appropriate livestock breeding strategies (new breeds and genetic types) that results in long-term climatic stress and disease tolerant breeds </li></ul><ul><li>designing climate contingency plan to counteract the harmful future impact of climate change </li></ul><ul><li>Develop appropriate livestock management systems and packages that include the issue of climate change </li></ul>
  26. 26. <ul><li>Different crops/livestock have different climate requirements, future studies need to be focused on specific crop/livestock responses and adaptation ,particularly, crops/livestock which have long-term implications for food security. </li></ul><ul><li>How climate change shift the agro-ecological zones of Ethiopia? </li></ul>
  27. 27. <ul><li>Thanks a million for listening!!! </li></ul>
  28. 28. In the near future: Tips for Nationally Appropriate Mitigation Actions (NAMA’S) of Ethiopia By Meseret Molla