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A Microeconometric Analysis of Adapting Portfolios to Climate Change: Adoption of Agricultural Systems in Latin America

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  • S. Niggol Seo

Abstract

This paper develops a microeconometric analysis of adapting portfolios in response to climate change using information on South American farmers' adoption of agricultural systems taken from approximately 2,000 household surveys. The results show that farmers in a hotter climate prefer a mixed system over specialized systems either in crops or livestock. Under a hot and dry scenario, the land values of all three systems would fall, but the damage would be much smaller in the mixed system (−10%) than for the farms specializing in crops (−20%). Farmers are predicted to lose 8% of their land's value under the Canadian Climatic Center (CCC) scenario, but only 2% under the Parallel Climate Model (PCM). Losses would increase to 18% if they do not adapt.

Suggested Citation

  • S. Niggol Seo, 2010. "A Microeconometric Analysis of Adapting Portfolios to Climate Change: Adoption of Agricultural Systems in Latin America," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 32(3), pages 489-514.
    • Handle: RePEc:oup:apecpp:v:32:y:2010:i:3:p:489-514.
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    Cited by:

    1. Pratap S. Birthal & Jaweriah Hazrana & Digvijay S. Negi, 2019. "A multilevel analysis of drought risk in Indian agriculture: implications for managing risk at different geographical levels," Climatic Change, Springer, vol. 157(3), pages 499-513, December.
    2. S. Niggol Seo, 2017. "Beyond the Paris Agreement: Climate change policy negotiations and future directions," Regional Science Policy & Practice, Wiley Blackwell, vol. 9(2), pages 121-140, June.
    3. Hailemariam Teklewold & Alemu Mekonnen & Gunnar Kohlin & Salvatore Di Falco, 2017. "Does Adoption Of Multiple Climate-Smart Practices Improve Farmers’ Climate Resilience? Empirical Evidence From The Nile Basin Of Ethiopia," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 8(01), pages 1-30, February.
    4. Dardonville, Manon & Urruty, Nicolas & Bockstaller, Christian & Therond, Olivier, 2020. "Influence of diversity and intensification level on vulnerability, resilience and robustness of agricultural systems," Agricultural Systems, Elsevier, vol. 184(C).
    5. Birthal, Pratap S. & Hazrana, Jaweriah, 2019. "Crop diversification and resilience of agriculture to climatic shocks: Evidence from India," Agricultural Systems, Elsevier, vol. 173(C), pages 345-354.
    6. Seo, S. Niggol, 2011. "Is an integrated farm more resilient against climate change? A micro-econometric analysis of portfolio diversification in African agriculture: Reply," Food Policy, Elsevier, vol. 36(3), pages 450-451, June.
    7. Tesfaye C. Cholo & Luuk Fleskens & Diana Sietz & Jack Peerlings, 2018. "Is Land Fragmentation Facilitating or Obstructing Adoption of Climate Adaptation Measures in Ethiopia?," Sustainability, MDPI, vol. 10(7), pages 1-14, June.
    8. Salvatore Di Falco & Marcella Veronesi, 2013. "How Can African Agriculture Adapt to Climate Change? A Counterfactual Analysis from Ethiopia," Land Economics, University of Wisconsin Press, vol. 89(4), pages 743-766.
    9. Murray, Anthony G & Mills, Bradford F, 2014. "Estimating the Resiliency of Zambian Smallholder Farmers: Evidence from a Three-Wave Panel," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170234, Agricultural and Applied Economics Association.
    10. Gallego-Álvarez, Isabel & García-Rubio, Raquel & Martínez-Ferrero, Jennifer, 2018. "Environmental performance concerns in Latin America: Determinant factors and multivariate analysis," Revista de Contabilidad - Spanish Accounting Review, Elsevier, vol. 21(2), pages 206-221.
    11. Balaine, Lorraine & Buckley, Cathal & Dillon, Emma J., 2022. "Mixed public-private and private extension systems: A comparative analysis using farm-level data from Ireland," Land Use Policy, Elsevier, vol. 117(C).
    12. McFadden, Jonathan R., 2015. "Essays on climate change adaptation and biotechnologies in U.S. agriculture," ISU General Staff Papers 201501010800005635, Iowa State University, Department of Economics.
    13. Mu, Jianhong E. & McCarl, Bruce A. & Sleeter, Benjamin & Abatzoglou, John T. & Zhang, Hongliang, 2018. "Adaptation with climate uncertainty: An examination of agricultural land use in the United States," Land Use Policy, Elsevier, vol. 77(C), pages 392-401.
    14. Prince M. Etwire & David Fielding & Viktoria Kahui, 2019. "Climate Change, Crop Selection and Agricultural Revenue in Ghana: A Structural Ricardian Analysis," Journal of Agricultural Economics, Wiley Blackwell, vol. 70(2), pages 488-506, June.
    15. Seo, S. Niggol, 2011. "An analysis of public adaptation to climate change using agricultural water schemes in South America," Ecological Economics, Elsevier, vol. 70(4), pages 825-834, February.
    16. Sesmero, Juan P. & Ricker-Gilbert, Jacob E. & Cook, Aaron M., 2015. "How do African Farm Households Adapt to Climate Change? A Structural Analysis from Malawi," 2015 Conference, August 9-14, 2015, Milan, Italy 212688, International Association of Agricultural Economists.
    17. Ahmad, Munir & Nawaz, Muhammad & Iqbal, Muhammad & Javed, Sajid, 2014. "Analysing the Impact of Climate Change on Rice Productivity in Pakistan," MPRA Paper 72861, University Library of Munich, Germany.
    18. Sonja, Vermeulen & Meryl, Richards & Alessandro, De Pinto & Dino, Ferrarese & Peter, Läderach & Le, Lan & Marty, Luckert & Enrico, Mazzoli & Laura, Plant & Roberto, Rinaldi & Jim, Stephenson & Paul, W, 2016. "The Economic Advantage: Assessing the value of climate-change actions in agriculture," IFAD Advantage Series 304740, International Fund for Agricultural Development (IFAD).
    19. Cunha, Denis Antonio da & Coelho, Alexandre Braganca & Feres, Jose & Braga, Marcelo Jose, 2012. "Impacts of climate change on Brazilian agriculture: an analysis of irrigation as an adaptation strategy," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126223, International Association of Agricultural Economists.
    20. Denisard Alves & Paula Pereda, 2019. "Climate and Weather Impacts on Agriculture: The Case of Brazil," Working Papers, Department of Economics 2019_23, University of São Paulo (FEA-USP).
    21. S. Niggol Seo, 2015. "Adaptation to Global Warming as an Optimal Transition Process to A Greenhouse World," Economic Affairs, Wiley Blackwell, vol. 35(2), pages 272-284, June.

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