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Modelling Agricultural Production Risk and the Adaptation to Climate Change

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  • Finger, Robert
  • Schmid, Stéphanie

Abstract

A 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.

Suggested Citation

  • Finger, Robert & Schmid, Stéphanie, 2007. "Modelling Agricultural Production Risk and the Adaptation to Climate Change," MPRA Paper 3943, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:3943
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    References listed on IDEAS

    as
    1. John M. Antle & Susan M. Capalbo, 2001. "Econometric-Process Models for Integrated Assessment of Agricultural Production Systems," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(2), pages 389-401.
    2. Finger, Robert & Hediger, Werner, 2007. "The Application of Robust Regression to a Production Function Comparison – the Example of Swiss Corn," MPRA Paper 4740, University Library of Munich, Germany.
    3. Murat Isik & Stephen Devadoss, 2006. "An analysis of the impact of climate change on crop yields and yield variability," Applied Economics, Taylor & Francis Journals, vol. 38(7), pages 835-844.
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    6. Fuhrer, Jurg & Beniston, Martin & Calanca, Pierluigi & Torriani, Daniele Simone, 2007. "Alternative Hedging Strategies in Maize Production to Cope with Climate Variability and Change," 101st Seminar, July 5-6, 2007, Berlin Germany 9275, European Association of Agricultural Economists.
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    More about this item

    Keywords

    climate change; robust estimation; yield variation; corn; winter wheat; market liberalization;
    All these keywords.

    JEL classification:

    • 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 and their Management; Global Warming
    • 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

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