On the effects of climate variability on agricultural crops: evidence from an in-transition economy

The report by the IPPC (2007) estimated that 20% of all climate change effects will have an impact on the agricultural sector. While climate change has been identified as a key factor affecting yields and the availability and quality of agricultural products, empirical findings from the recent literature remain inconclusive as regards the effects of climatic elements—such as temperature and rainfall—on agricultural yields. This paper examines how weather affects the yields of agricultural crops while allowing for nonlinearity in the cause-effect transmission mechanism, and using an original database from different sources in Tunisia related to climate variables (temperature and rainfall) and regional crops (cereals) in 24 regions. We propose the implementation of a Panel Smooth Transition Regression (PSTR) approach which allows for a possible presence of threshold effects of temperature and rainfall on crop yields. Our results suggest that the positive impact of rainfall on crop productivity is reduced when the temperature is high. However, the rising temperature has more beneficial effects on crop yields if rainfalls enter the high regime. Therefore, adaptation measures are strongly recommended to cope with climatic conditions. For instance, a public policy related to the water demand management system that promotes the efficient use of scarce water resources would be helpful for privileging and subsidizing the areas that are threatened. Moreover, policymakers should consider encouraging the development of drought-tolerant crops, especially in Southern Tunisia, where global warming has caused a severe drought. In Northern Tunisia, adaptation measures may include choosing tree species and forestry practices less vulnerable to storms and fires, especially in Jendouba, the region of Tunisia that is highly forested.