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Endogenous irrigation : the impact of climate change on farmers in Africa

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  • Kurukulasuriya, Pradeep
  • Mendelsohn, Robert

Abstract

Previous Ricardian analyses of agriculture have either omitted irrigation or treated irrigation as though it is exogenous. In practice, it is a choice by farmers that is sensitive to climate. This paper develops a choice model of irrigation in the context of a Ricardian model of cropland. The authors examine how climate affects the decision to use irrigation and then how climate affects the net revenues of dryland and irrigated land. This Ricardian"selection"model, using a modified Heckman model, is then estimated across 8,400 farmers in Africa. The analysis explicitly models irrigation but controls for the endogeneity of irrigation. The authors find that the choice of irrigation is sensitive to both temperature and precipitation. Simulations of the welfare impacts of several climate scenarios demonstrate that a model which assumes irrigation is exogenous provides a biased estimate of the welfare effects of climate change. If dryland and irrigation are to be estimated separately in the Ricardian model, irrigation must be modeled endogenously. The results also indicate that African agriculture is sensitive to climate change. Many farmers in Africa will experience net revenue losses from warming. Irrigated farms, on the other hand, are more resilient to temperature change and, on the margin, are likely to realize slight gains in productivity. But any reduction in precipitation will be especially deleterious to dryland farmers, generally the poorest segment of the agriculture community. The results indicate that irrigation is an effective adaptation against loss of rainfall and higher temperatures provided there is sufficient water available. This will be an effective remedy in select regions of Africa with water. However, for many regions there is no available surface water, so that warming scenarios with reduced rainfall are particularly deleterious.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4278.

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Date of creation: 01 Jul 2007
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Handle: RePEc:wbk:wbrwps:4278

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Related research

Keywords: Climate Change; Environmental Economics&Policies; Water Supply and Systems; Water Resources Assessment; Global Environment Facility;

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References

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  1. Jinxia Wang & Robert Mendelsohn & Ariel Dinar & Jikun Huang & Scott Rozelle & Lijuan Zhang, 2009. "The impact of climate change on China's agriculture," Agricultural Economics, International Association of Agricultural Economists, vol. 40(3), pages 323-337, 05.
  2. Cline, William R, 1996. "The Impact of Global Warming on Agriculture: Comment," American Economic Review, American Economic Association, vol. 86(5), pages 1309-11, December.
  3. Wolfram Schlenker & W. Michael Hanemann & Anthony C. Fisher, 2005. "Will U.S. Agriculture Really Benefit from Global Warming? Accounting for Irrigation in the Hedonic Approach," American Economic Review, American Economic Association, vol. 95(1), pages 395-406, March.
  4. Heltberg, Rasmus & Tarp, Finn, 2001. "Agricultural Supply Response and Poverty in Mozambique," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  5. Mendelsohn, Robert & Nordhaus, William D & Shaw, Daigee, 1994. "The Impact of Global Warming on Agriculture: A Ricardian Analysis," American Economic Review, American Economic Association, vol. 84(4), pages 753-71, September.
  6. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January.
  7. Mendelsohn, Robert & Nordhaus, William, 1996. "The Impact of Global Warming on Agriculture: Reply," American Economic Review, American Economic Association, vol. 86(5), pages 1312-15, December.
  8. John K. Horowitz & John Quiggin, 1999. "The Impact of Global Warming on Agriculture: A Ricardian Analysis: Comment," American Economic Review, American Economic Association, vol. 89(4), pages 1044-1045, September.
  9. Lee, Lung-Fei, 1983. "Generalized Econometric Models with Selectivity," Econometrica, Econometric Society, vol. 51(2), pages 507-12, March.
  10. Roy Darwin, 1999. "The Impact of Global Warming on Agriculture: A Ricardian Analysis: Comment," American Economic Review, American Economic Association, vol. 89(4), pages 1049-1052, September.
  11. Dubin, Jeffrey A & McFadden, Daniel L, 1984. "An Econometric Analysis of Residential Electric Appliance Holdings and Consumption," Econometrica, Econometric Society, vol. 52(2), pages 345-62, March.
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Citations

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Cited by:
  1. Seo, Niggol & Mendelsohn, Robert & Dinar, Ariel & Kurukulasuriya, Pradeep & Hassan, Rashid, 2008. "Long-term adaptation : selecting farm types across agro-ecological zones in Africa," Policy Research Working Paper Series 4602, The World Bank.
  2. Seo, Niggol & Mendelsohn, Robert & Kurukulasuriya, Pradeep & Dinar, Ariel & Hassan, Rashid, 2008. "Differential adaptation strategies to climate change in African cropland by agro-ecological zones," Policy Research Working Paper Series 4600, The World Bank.
  3. Wang, Jinxia & Mendelsohn, Robert & Dinar, Ariel & Huang, Jikun, 2008. "How China's farmers adapt to climate change," Policy Research Working Paper Series 4758, The World Bank.
  4. De Salvo, Maria & Raffaelli, Roberta & Moser, Riccarda, 2013. "The impact of climate change on permanent crops in an Alpine region: A Ricardian analysis," Agricultural Systems, Elsevier, vol. 118(C), pages 23-32.
  5. Wang, Jinxia & Mendelsohn, Robert & Dinar, Ariel & Huang, Jikun & Rozelle, Scott & Zhang, Lijuan, 2008. "Can China continue feeding itself ? the impact of climate change on agriculture," Policy Research Working Paper Series 4470, The World Bank.
  6. Abdulai, Awudu & Owusu, Victor & Bakang, John-Eudes A., 2011. "Adoption of safer irrigation technologies and cropping patterns: Evidence from Southern Ghana," Ecological Economics, Elsevier, vol. 70(7), pages 1415-1423, May.
  7. Seo, S. Niggol & Mendelsohn, Robert & Dinar, Ariel & Hassan, Rashid & Kurukulasuriya, Pradeep, 2008. "A ricardian analysis of the distribution of climate change impacts on agriculture across agro-ecological zones in Africa," Policy Research Working Paper Series 4599, The World Bank.
  8. Seo, S. Niggol & Mendelsohn, Robert & Dinar, Ariel & Kurukulasuriya, Pradeep, 2008. "Differential adaptation strategies by agro-ecological zones in African livestock management," Policy Research Working Paper Series 4601, The World Bank.
  9. Seo, S. Niggol & Mendelsohn, Robert, 2008. "A structural ricardian analysis of climate change impacts and adaptations in African agriculture," Policy Research Working Paper Series 4603, The World Bank.

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