Cost and benefit analysis of adoption of climate change adaptation options among rural rice farmers in Nepal

Abstract

This paper estimates cost and benefit of adoption of climate change adaptation options available to the rural rice farmers of Nepal. Multi-stage sampling technique was used to source respondents for the study and used structured questionnaire techniques to collect data from 773 households from seven districts - 3 from Terai and 4 from Hilly region of Nepal. The result revealed that there are 13 major adaptation options rice farmers practice in order to protect themselves from climatic risk. Among the given adaptation options, the first three costly adaptation options are the alternative irrigation practice which incurred average cost of US $ 69.95 (US$ 1 = 102.84 Nepalese Rupees), followed by denser plantation of local seeds ($ 20.69) and using climate smart varieties ($ 18.06). Nearby 88% farmers practiced more than one adaptation strategies on the same farm with the aim of reducing the effect of extreme climatic conditions. Total cost and revenue revealed that per unit total cost ranges from $ 28.34 to $ 32.79 whereas per unit total revenue ranges $ 33.4 to $ 49.02. Surprisingly, it is observed that farmers who do not adopt any adaptation options are able to received highest income from per unit production.