Economic Impact of Climate Change on Tunisian Agriculture: The Case of Wheat

Abstract

This paper measures the potential economic impact of climate change on durum wheat in Tunisia using the Ricardian approach. A model using panel data was estimated for the period 1990–2010 over the main cultivation regions. Gross margin of the durum wheat under rainfed conditions was used as the dependent variable while the explanatory variables were mainly related to climate such as precipitation and temperature, technological progress, and type of soil. Empirical findings show that precipitations during different stages of the growing season affect positively net-income. In addition, the interactions variables between temperature and precipitation in different growth stages are negative. The assessment impact of technology shows a positive coefficient of trend parameter but not statistically significant. Finally, the soil quality index parameter is positively correlated with the net revenue per hectare. This finding indicates that good quality of soil may improve the net income of farmers by increasing wheat yields. Climate change impact was simulated using scenarios from the HadCM3 global circulation. Empirical results indicate that economic impacts are not uniformly distributed across the different regions of Tunisia. These impacts are likely to be more accentuated in the arid regions. A rise in temperature and a reduction in rainfall would cause reductions in gross margin by 4 % in sub-humid areas and 24 % in arid zones. The results further suggest the necessity for wider diffusion of drought-tolerant varieties among farmers and the identification of new agricultural practices as advisable adaptation strategies in order to alleviate the effects of climate change on farmer’s income.