Abstract
The study was carried out to determine the economic impact of climate change on cocoa producing states in south western states, Nigeria using Ricardian analytical procedure. The specific objectives were to: analyze the economic impact of climate change on cocoa production, estimate the marginal impact of climate change on net cocoa farm revenue in the areas of study, find out whether there is a significant mean difference in climatic variables among the cocoa producing states in the south-west Nigeria and make useful recommendations based on findings. Data were sourced from CBN bulletin, Federal Ministry of Agriculture and Nigeria Meteorological Agency (NIMET), spanning 1981 - 2015. Model specification was based on Ordinary Least Square (OLS) multiple regression technique using Ricardian framework on net revenue. Data obtained were analyzed using both descriptive and inferential statistics. Results show that 11, 47 and 77% of the variations in net revenue from cocoa production were explained by rainfall and temperature for Oyo, Ondo and Osun states respectively. The study also affirms that the climatic (rainfall and temperature) and non climatic (area, producer price, yield and technology) variables accounts for 98%, 97% and 96% of the variations in net revenue per hectare of cocoa production respectively in Oyo, Ondo and Osun states. The study further showed that there was a significant difference in climate change over time across the cocoa producing states at 1% level of probability. The study indicated that climatic changes culminated in economic losses/benefits of about ₦27.63million (₦3.50million), ₦5.6million (₦14.90million) and ₦1.3million (₦5.8million) respectively across the states amidst varying marginal economic losses of ₦1billion (Ondo) and benefits of ₦10.08 and ₦270.48million (Oyo and Osun States) in the study area. Based on these, it was concluded that climatic changes over time are not the only parameters that accounted for economic losses and benefits, other factors also contributed. It was recommended that low-yielding cocoa trees, which have exceeded optimum production ages be replaced with the high-yielding ones alongside farmers should cultivate cocoa varieties that are tolerant to climate change in the area of consideration, ab initio.Keywords: Climate change, Cocoa, Ricardian, Production, Economic impact.
Highlights
The Primacies of agriculture to African economies have never been in doubt
Cocoa is the main export crop grown in the state and it is second to Ondo in terms of cocoa production (Ogunsola, Olugbire, Oyekale and Aremu, 2015; Popoola, Ogunsola and Salman, 2015)
The trend of climate variables on cocoa yield shows that temperature in Ondo, Osun and Oyo were fluctuating during the period under consideration
Summary
The Primacies of agriculture to African economies have never been in doubt. Its role in the provision of foreign exchange and development of economies cannot be overstated, as it remained for a long time, the main source of foreign exchange earnings (Nkamleu et al, 2010; Adeniyi and Ogunsola, 2014). Climate is the effect of weather over a long period of time, usually twenty five years (Oluyole and Adebiyi, 2007). It is a major determinant of both the location and productivity of agricultural activities. Several studies have examined the impact of climate change on agriculture using case studies, statistical analysis and simulation models (Oluyole, and Usman, 2006). The variability of these climatic elements, determines the suitability of a place to grow cocoa and even the overall output from the crop. There are fourteen states producing cocoa in the country, namely: Ondo, Cross River, Osun, Ekiti, Ogun, Oyo, Edo, Delta, Kwara, Kogi, Abia, Taraba, Adamawa and Akwa Ibom States
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