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Climate Change and the Economics of Farm Management in the Face of Land Degradation: Dryland Salinity in Western Australia

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  • Michele John
  • David Pannell
  • Ross Kingwell

Abstract

Projected changes in climate would affect not only the profitability of agriculture, but also the way it is managed, including the way issues of land conservation are managed. This study provides a detailed analysis of these effects for an extensive dryland farming system in south‐west Australia. Using a whole‐farm linear programming model, with discrete stochastic programming to represent climate risk, we explore the consequences of several climate scenarios. Climate change may reduce farm profitability in the study region by 50% or more compared to historical climate. Results suggest a decline in the area of crop on farms, due to greater probability of poor seasons and lower probability of very good seasons. The reduced profitability of farms would likely affect the capacity of farmers to adopt some practices that have been recommended to farmers to prevent land degradation through dryland salinization. In particular, establishment of perennial pastures (lucerne or alfalfa, Medicago sativa), woody perennials (“oil mallees”, Eucalyptus spp.), and salt‐tolerant shrubs for grazing (“saltland pastures”, Atriplex spp.) may become slightly more attractive in the long run (i.e., relative to other enterprises) but harder to adopt due to their high establishment costs in the context of lower disposable income. Les changements climatiques prévus influeraient non seulement sur la rentabilité de l'agriculture, mais aussi sur la gestion, y compris la façon de gérer les questions de conservation des terres. La présente étude offre une analyse détaillée de ces effets sur un système d'aridoculture extensive dans le sud‐ouest de l'Australie. À l'aide d'un modèle de programmation linéaire d'une exploitation, comprenant une programmation stochastique discrète pour représenter le risque lié aux changements climatiques, nous avons examiné les conséquences de plusieurs scénarios climatiques. Dans la région à l'étude, un changement climatique pourrait diminuer la rentabilité d'une exploitation de 50 p. 100 ou plus par rapport au climat historique. Les résultats ont laissé supposer un déclin dans le domaine des cultures, en raison de la probabilité accrue de connaître des saisons médiocres et de la probabilité diminuée de connaître saisons exceptionnelles. Une diminution de la rentabilité des exploitations freinerait probablement la capacité des producteurs à adopter certaines pratiques recommandées pour prévenir la dégradation des sols par la salinisation des terres arides. Certaines pratiques, telles que l'établissement de pâturages de plantes fourragères vivaces (luzerne ou Medicago sativa), de plantes ligneuses vivaces (Eucalyptus) et d'arbustes tolérants au sel (Atriplex), peuvent devenir un peu plus attrayantes à long terme (c'est‐à‐dire, comparativement à d'autres pratiques), mais également plus difficiles à adopter en raison des coûts d'établissement élevés dans un contexte de faible revenu disponible.

Suggested Citation

  • Michele John & David Pannell & Ross Kingwell, 2005. "Climate Change and the Economics of Farm Management in the Face of Land Degradation: Dryland Salinity in Western Australia," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 53(4), pages 443-459, December.
  • Handle: RePEc:bla:canjag:v:53:y:2005:i:4:p:443-459
    DOI: 10.1111/j.1744-7976.2005.00029.x
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    Cited by:

    1. Ning An & Paul J. Thomassin, 2016. "The Economic Impact of Climate Change on Cash Crop Farms in Québec and Ontario," CIRANO Working Papers 2016s-31, CIRANO.
    2. Marco Zitti & Adele Sateriano & Luca Salvati, 2013. "Agricultural Profitability And Susceptibility To Soil Degradation In A Changing Mediterranean Landscape," Romanian Journal of Regional Science, Romanian Regional Science Association, vol. 7(1), pages 81-102, JUNE.
    3. Ross Kingwell, 2021. "Making Agriculture Carbon Neutral Amid a Changing Climate: The Case of South-Western Australia," Land, MDPI, vol. 10(11), pages 1-20, November.
    4. M. Qadir & E. Quillérou & V. Nangia & G. Murtaza & M. Singh & R.J. Thomas & P. Drechsel & A.D. Noble, 2014. "Economics of salt‐induced land degradation and restoration," Natural Resources Forum, Blackwell Publishing, vol. 0(4), pages 282-295, November.
    5. Oliver Musshoff & Norbert Hirschauer, 2009. "Optimizing Production Decisions Using a Hybrid Simulation–Genetic Algorithm Approach," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 57(1), pages 35-54, March.
    6. Kandulu, John M. & Bryan, Brett A. & King, Darran & Connor, Jeffery D., 2012. "Mitigating economic risk from climate variability in rain-fed agriculture through enterprise mix diversification," Ecological Economics, Elsevier, vol. 79(C), pages 105-112.
    7. Monjardino, Marta & Revell, Dean & Pannell, David J., 2010. "The potential contribution of forage shrubs to economic returns and environmental management in Australian dryland agricultural systems," Agricultural Systems, Elsevier, vol. 103(4), pages 187-197, May.
    8. Kingwell, Ross S., 2006. "Is Hanrahan sort of right? Will climate change ruin us all?," 2006 Conference (50th), February 8-10, 2006, Sydney, Australia 137961, Australian Agricultural and Resource Economics Society.
    9. Fulco Ludwig & Stephen Milroy & Senthold Asseng, 2009. "Impacts of recent climate change on wheat production systems in Western Australia," Climatic Change, Springer, vol. 92(3), pages 495-517, February.
    10. Lokonon, Boris Odilon & Savadogo, Kimseyinga & Mbaye, Ahmadou, 2015. "Assessing the impacts of climate shocks on farm performance and adaptation responses in the Niger basin of Benin," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 10(3), pages 1-16, September.
    11. An, Ning & Thomassin, Paul J., 2015. "The economic impact of climate change on cash crop farms in Quebec and Ontario," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205702, Agricultural and Applied Economics Association.
    12. Byrne, F. & Robertson, M.J. & Bathgate, A. & Hoque, Z., 2010. "Factors influencing potential scale of adoption of a perennial pasture in a mixed crop-livestock farming system," Agricultural Systems, Elsevier, vol. 103(7), pages 453-462, September.
    13. Thamo, Tas & Addai, Donkor & Pannell, David J. & Robertson, Michael J. & Thomas, Dean T. & Young, John M., 2017. "Climate change impacts and farm-level adaptation: Economic analysis of a mixed cropping–livestock system," Agricultural Systems, Elsevier, vol. 150(C), pages 99-108.
    14. Kingwell, Ross & John, Michele, 2007. "The influence of farm landscape shape on the impact and management of dryland salinity," Agricultural Water Management, Elsevier, vol. 89(1-2), pages 29-38, April.
    15. M. Qadir & E. Quillérou & V. Nangia & G. Murtaza & M. Singh & R.J. Thomas & P. Drechsel & A.D. Noble, 2014. "Economics of salt‐induced land degradation and restoration," Natural Resources Forum, Blackwell Publishing, vol. 38(4), pages 282-295, November.
    16. Penny, Jessica & Ordens, Carlos M. & Barnett, Steve & Djordjević, Slobodan & Chen, Albert S., 2023. "Vineyards, vegetables or business-as-usual? Stakeholder-informed land use change modelling to predict the future of a groundwater-dependent prime-wine region under climate change," Agricultural Water Management, Elsevier, vol. 287(C).
    17. Khan, Shahbaz & Rana, Tariq & Hanjra, Munir A., 2008. "A cross disciplinary framework for linking farms with regional groundwater and salinity management targets," Agricultural Water Management, Elsevier, vol. 95(1), pages 35-47, January.
    18. Carter, Chris & Crean, Jason & Kingwell, Ross S. & Hertzler, Greg, 2006. "Managing and Sharing the Risks of Drought in Australia," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25319, International Association of Agricultural Economists.
    19. Kandulu, John M., 2013. "Quantifying the extent to which enterprise mix diversification can mitigate economic risk in rainfed agriculture," Australasian Agribusiness Review, University of Melbourne, Department of Agriculture and Food Systems, vol. 21, pages 1-14.
    20. Mullen, John & Keogh, Mick, 2013. "The Future Productivity and Competitiveness Challenge for Australian Agriculture," 2013 Conference (57th), February 5-8, 2013, Sydney, Australia 152170, Australian Agricultural and Resource Economics Society.
    21. Kingwell, Ross S., 2006. "Climate change in Australia: agricultural impacts and adaptation," Australasian Agribusiness Review, University of Melbourne, Department of Agriculture and Food Systems, vol. 14.

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