Assessing the Economic Impact of Climate Change on Rice Production in Bangladesh: A Ricardian Approach for Sustainable Agriculture

Agriculture remains a vital sector in Bangladesh, employing over 40% of the workforce and contributing significantly to manufacturing and services. However, climate change presents a growing threat to agricultural productivity, particularly rice, the country’s staple crop. This study examines the economic impact of climate change on rice production across nine climate zones in Bangladesh: Bogura, Cumilla, Faridpur, Jessore, Mymensingh, Patuakhali, Rajshahi, Rangpur, and Tangail. Utilizing the Ricardian approach, which estimates the net value of land based on crop revenues, the study integrates primary data from 450 households and secondary data on temperature and rainfall from the Bangladesh Meteorological Department. The analysis reveals that rising temperatures during the dry season positively affect net crop revenue, while higher temperatures during the wet season have the opposite effect. Rainfall shows a marginally beneficial impact on rice production in both seasons, with the temperature-rainfall interaction yielding mixed outcomes: positive during the dry season but negative during the wet season. Factors such as the age and gender of household heads, access to extension services, credit availability, irrigation, soil quality, and land type significantly influence net crop revenues. The study offers policy recommendations to mitigate the adverse effects of climate variability on rice production and promote sustainable agricultural practices in Bangladesh.