Modelling Agricultural Production Risk and the Adaptation to Climate Change
AbstractA 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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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 3943.
Date of creation: Jul 2007
Date of revision:
climate change; robust estimation; yield variation; corn; winter wheat; market liberalization;
Other versions of this item:
- Robert Finger & Stéphanie Schmid, 2008. "Modeling agricultural production risk and the adaptation to climate change," Agricultural Finance Review, Emerald Group Publishing, vol. 68(1), pages 25-41, September.
- Finger, Robert & Schmid, Stephanie, 2007. "Modeling agricultural production risk and the adaptation to climate change," 101st Seminar, July 5-6, 2007, Berlin Germany 9270, European Association of Agricultural Economists.
- 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; Programming Models; Mathematical and Simulation Modeling - - - 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 and Methodology: General - - - General
- Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
This paper has been announced in the following NEP Reports:
- NEP-AGR-2007-07-13 (Agricultural Economics)
- NEP-ALL-2007-07-13 (All new papers)
- NEP-ENE-2007-07-13 (Energy Economics)
- NEP-ENV-2007-07-13 (Environmental Economics)
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.:
- Finger, Robert & Hediger, Werner, 2007.
"The Application of Robust Regression to a Production Function Comparison – the Example of Swiss Corn,"
4740, University Library of Munich, Germany.
- Robert Finger & Werner Hediger, 2008. "The Application of Robust Regression to a Production Function Comparison – the Example of Swiss Corn," IED Working paper 08-02, IED Institute for Environmental Decisions, ETH Zurich.
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"Econometric-Process Models For Integrated Assessment Of Agricultural Production Systems,"
Trade Research Center Research Discussion Papers
29234, Montana State University, Department of Agricultural Economics and Economics.
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- Murat Isik & Madhu Khanna, 2003. "Stochastic Technology, Risk Preferences, and Adoption of Site-Specific Technologies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(2), pages 305-317.
- Neil R. Miller, 2006. "Is Site-Specific Yield Response Consistent over Time? Does It Pay?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(2), pages 471-483.
- Lehmann, Niklaus & Finger, Robert & Klein, Tommy & Calanca, Pierluigi & Walter, Achim, 2012. "Adapting Towards Climate Change: A Bioeconomic Analysis of Winterwheat and Grain Maize," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126483, International Association of Agricultural Economists.
- Heuson, Clemens & Gawel, Erik & Gebhardt, Oliver & Hansjürgens, Bernd & Lehmann, Paul & Meyer, Volker & Schwarze, Reimund, 2012. "Ökonomische Grundfragen der Klimaanpassung: Umrisse eines neuen Forschungsprogramms," UFZ Reports 02/2012, Helmholtz Centre for Environmental Research (UFZ).
- Finger, Robert, 2011. "Reductions of Agricultural Nitrogen Use Under Consideration of Production and Price Risks," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114356, European Association of Agricultural Economists.
- Heuson, Clemens & Gawel, Erik & Gebhardt, Oliver & Hansjürgens, Bernd & Lehmann, Paul & Meyer, Volker & Schwarze, Reimund, 2012. "Fundamental questions on the economics of climate adaptation: Outlines of a new research programme," UFZ Reports 05/2012, Helmholtz Centre for Environmental Research (UFZ).
- Finger, Robert, 2010.
"Evidence of slowing yield growth - The example of Swiss cereal yields,"
Elsevier, vol. 35(2), pages 175-182, April.
- Finger, Robert, 2007. "Evidence of slowing yield growth – the example of Swiss cereal yields," MPRA Paper 9475, University Library of Munich, Germany.
- Finger, Robert, 2012. "Nitrogen use and the effects of nitrogen taxation under consideration of production and price risks," Agricultural Systems, Elsevier, vol. 107(C), pages 13-20.
- Finger, Robert & Gerwig, Claude N., 2007.
"The Impact Of Climate Change On The Profitability Of Site Specific Technologies,"
47th Annual Conference, Weihenstephan, Germany, September 26-28, 2007
7574, German Association of Agricultural Economists (GEWISOLA).
- Finger, Robert & Gerwig, Claude N., 2007. "The Impact of Climate Change on the Profitability of Site Specific Technologies," MPRA Paper 4792, University Library of Munich, Germany.
- Ines Kapphan & Pierluigi Calanca & Annelie Holzkaemper, 2012. "Climate Change, Weather Insurance Design and Hedging Effectiveness," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan, vol. 37(2), pages 286-317, April.
- Finger, Robert, 2012. "Modeling the sensitivity of agricultural water use to price variability and climate change—An application to Swiss maize production," Agricultural Water Management, Elsevier, vol. 109(C), pages 135-143.
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