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Farmer Adaptations to Climate and Environmental Change

Paper Session

Saturday, Jan. 4, 2020 12:30 PM - 2:00 PM

Manchester Grand Hyatt San Diego, Mission Beach A
Hosted By: Agricultural and Applied Economics Association
  • Chair: Robert Chambers, University of Maryland-College Park

Security of Property Rights and Long-Term Agricultural Investments: Drought, Water Rights, and Perennial Cropping Decisions in California

Frances Moore
,
University of California-Davis
Jesus Arellano Gonzalez
,
University of California-Davis

Abstract

Secure property rights over land have been shown to be important in enabling farmer to make
investment decisions that improve long-term productivity. In arid environments, access to water
might be as important as land in determining the value of investments to farmers, but the value
of secure water rights has been less widely investigated. Given climate change is expected to
increase both crop water requirements and the variability of rainfall, understanding how
property rights over water affect investment decisions on irrigated land is important for
understanding climate change impacts and the margins of adaptation available to farmers. In this paper, we test whether secure access to water affects the decision to switch into perennial crops using a 20-year dataset of cropping decisions in all 13,000 plots in Kern County, California. Perennial crops such as stone fruits, tree nuts, and citrus are typically high-value, but incur large up-front establishment costs that pay off gradually over the life of the tree. These investments are thus highly exposed to fluctuations in annual rainfall that affect the availability of surface irrigation water. Irrigation districts in Kern County obtain water from a variety of sources including both long-distance transfers along aqueducts from northern California and the local Kern River. These sources are differentially exposed to physical water scarcity during dry years meaning farmers in some areas have more secure access to water, making the decision to grow perennials a less risky option. This paper will use irrigation district boundaries in a regression discontinuity design to test how access to water has affected cropping decisions.

Do Climate Signals Matter? Evidence from Agriculture

Pierre Merel
,
University of California-Davis
Matthew Gammans
,
University of California-Davis
Xiaomeng Cui
,
Jinan University

Abstract

The foreseeable impacts of climate change on humans depend critically on the ability of societies to adapt to new climatic signals. Recent literature based on the US experience suggest little to no adaptation to climate trends in crop agriculture. We revisit this question using crop yield data from France and the US, as well as a novel panel econometrics framework that allows yearly outcomes to jointly respond to contemporaneous weather and climate signals, delivering estimates of both short-run (without climatic adaptation) and long-run (with climatic adaptation) warming impacts. In our most conservative model, which strictly relies on trends in climate to identify adaptation potential, we find implicit evidence of adaptation to beneficial temperatures (as captured by growing degree days), extreme heat, and precipitation. The evidence is particularly strong for France, which has experienced temperature trends over the past decades about twice as steep as those occurring in the US corn belt. Counterfactual analysis suggests that in France and the US, climatic adaptation has and can buffer against detrimental warming effects.

Are Yields Slowing Down Due to Recent Climate Trends? Evidence from a Farm-level Panel in France?

Simone Pieralli
,
National Institute of Agronomic Research (INRA)
Ariel Ortiz-Bobea
,
Cornell University

Abstract

There is a clear slowdown in wheat yields in much of Western Europe. Recent work has linked
this slowdown to ongoing climate trends. However, this literature has not explicitly accounted
for input use, which has been strongly affected by recent reforms of the European Common
Agricultural Policy. For instance, decoupling subsidies from output quantities changed incentives for producers, potentially leading to a reduction in the intensity of input usage. However, each farmer is different and unpacking the effect of individual farmers’ inputs usage on the effect that climate has on yields requires a disaggregated analysis at the farm level. We thus rely on farm level panel data from 18,178 farms in France over 1990-2015 to decompose to what extent the recent slowdown can be attributed to climate trends, input usage and technological change. This work also highlights the interplay between farmer input use and technological change in modulating the role of weather in agricultural production.
JEL Classifications
  • Q5 - Environmental Economics