Assessment of the economic impacts of climate change on agriculture in Zimbabwe : a ricardian approach

Abstract

This study uses the Ricardian approach to examine the economic impact of climate change on agriculture in Zimbabwe. Net farm revenue is regressed against various climate, soil, hydrological and socio-economic variables to help determine the factors that influence variability in net farm revenues. The study is based on data from a survey of 700 smallholder farming households interviewed across the country. The empirical results show that climatic variables (temperature and precipitation) have significant effects on net farm revenues in Zimbabwe. In addition to the analysis of all farms, the study also analyzes the effects on dryland farms and farms with irrigation. The analysis indicates that net farm revenues are affected negatively by increases in temperature and positively by increases in precipitation. The results from sensitivity analysis suggest that agricultural production in Zimbabwe's smallholder farming system is significantly constrained by climatic factors (high temperature and low rainfall). The elasticity results show that the changes in net revenue are high for dryland farming compared to farms with irrigation. The results show that farms with irrigation are more resistant to changes in climate, indicating that irrigation is an important adaptation option to help reduce the impact of further changes in climate. An overview of farmer adaptation to changing climate indicates that farmers are already using some adaptation strategies-such as dry and early planting, growing drought resistant crops, changing planting dates, and using irrigation-to cushion themselves against further anticipated adverse climatic conditions. An important policy message from the empirical findings is that there is a need to provide adequate extension information services to ensure that farmers receive up-to-date information about rainfall patterns in the forthcoming season so that they make well-informed decisions on their planting dates. Policies that increase farmer training and access to credit and aid facilities and help farmers acquire livestock and other important farm assets can help improve net farm performance. Ensuring the availability and accessibility of fertilizers and crop seeds before the onset of the next cropping season can also significantly improve net farm performance across households.