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Modelling Agricultural Production Risk and the Adaptation to Climate Change

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Author Info
Finger, Robert
Schmid, Stéphanie

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Abstract

A model that integrates biophysical simulations in an economic model is used to analyze the impact of climate change on crop production. The biophysical model simulates future plant-management-climate relationships and the economic model simulates farmers’ adaptation actions to climate change using a nonlinear programming approach. Beyond the development of average yields, special attention is devoted to the impact of climate change on crop yield variability. This study analyzes corn and winter wheat production on the Swiss Plateau with respect to climate change scenarios that cover the period of 2030-2050. In our model, adaptation options such as changes in seeding dates, changes in production intensity and the adoption of irrigation farming are considered. Different scenarios of climate change, output prices and farmers’ risk aversion are applied in order to show the sensitivity of adaptation strategies and crop yields, respectively, on these factors. Our results show that adaptation actions, yields and yield variation highly depend on both climate change and output prices. The sensitivity of adaptation options and yields, respectively, to prices and risk aversion for winter wheat is much lower than for corn because of different growing periods. In general, our results show that both corn and winter wheat yields increase in the next decades. In contrast to other studies, we find the coefficient of variation of corn and winter wheat yields to decrease. We therefore conclude that simple adaptation measures are sufficient to take advantage of climate change in Swiss crop farming.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 3943.

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Date of creation: Jul 2007
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Handle: RePEc:pra:mprapa:3943

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Related research
Keywords: climate change robust estimation yield variation corn winter wheat market liberalization

Find related papers by JEL classification:
Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
C61 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Optimization Techniques; Programming Models; Dynamic Analysis
Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - General
Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Murat Isik & Stephen Devadoss, 2006. "An analysis of the impact of climate change on crop yields and yield variability," Applied Economics, Taylor and Francis Journals, vol. 38(7), pages 835-844, April. [Downloadable!] (restricted)
  2. Khanna, Madhu & Isik, Murat & Winter-Nelson, Alex, 2000. "Investment in site-specific crop management under uncertainty: implications for nitrogen pollution control and environmental policy," Agricultural Economics, Blackwell, vol. 24(1), pages 9-21, December. [Downloadable!] (restricted)
  3. Antle, John M & Capalbo, Susan M, 2001. " Econometric-Process Models for Integrated Assessment of Agricultural Production Systems," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 83(2), pages 389-401, May. [Downloadable!] (restricted)
  4. Finger, Robert & Hediger, Werner, 2007. "The Application of Robust Regression to a Production Function Comparison – the Example of Swiss Corn," MPRA Paper 4740, University Library of Munich, Germany. [Downloadable!]
  5. Teresa Serra & David Zilberman & Barry K. Goodwin & Allen Featherstone, 2006. "Effects of decoupling on the mean and variability of output," European Review of Agricultural Economics, Oxford University Press for the Foundation for the European Review of Agricultural Economics, vol. 33(3), pages 269-288, September.
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