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Weather shocks, adaptation and agricultural TFP: A cross-region comparison of Australian Broadacre farms

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  • Sheng, Yu
  • Zhao, Shiji
  • Yang, Sansi

Abstract

This paper investigates the dynamic impact of weather shocks on agricultural total factor productivity (TFP) of Australian broadacre industry, by applying a Panel Error Correction model (PECM) to the data of 32 agricultural regions over the period 1978–2013. In response to weather shocks, farmers take adaptive actions by adjusting their output and input structures to alleviate weather-induced loss in productivity. Moreover, farmers in regions with the least favorable climate condition are found to adapt to weather shocks more rapidly than those in regions with more favorable climate condition. Our finding highlights the importance of public policies to encourage farmers to improve adaptive capacities in the events of weather shock.

Suggested Citation

  • Sheng, Yu & Zhao, Shiji & Yang, Sansi, 2021. "Weather shocks, adaptation and agricultural TFP: A cross-region comparison of Australian Broadacre farms," Energy Economics, Elsevier, vol. 101(C).
    • Handle: RePEc:eee:eneeco:v:101:y:2021:i:c:s0140988321003133
    DOI: 10.1016/j.eneco.2021.105417
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    Cited by:

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    More about this item

    Keywords

    Agricultural TFP; Cross-region comparison; Weather shocks; Adaptive capacity;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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