Abstract
Climate change will increase simultaneous crop failures or too abundant harvests, creating global synchronized yield change (SYC), and may decrease stability in the portfolio of food supply sources in agricultural trade. This study evaluated the influence of SYC on the global agricultural market and trade liberalization. The analysis employed a global computable general equilibrium model combined with crop models of four major grains (i.e., rice, wheat, maize, and soybeans), based on predictions of five global climate models. Simulation results show that (1) the SYC structure was statistically robust among countries and four crops, and will be enhanced by climate change, (2) such synchronicity increased the agricultural price volatility and lowered social welfare levels more than expected in the random disturbance (non-SYC) case, and (3) trade liberalization benefited both food-importing and exporting regions, but such effects were degraded by SYC. These outcomes were due to synchronicity in crop-yield change and its ranges enhanced by future climate change. Thus, SYC is a cause of systemic risk to food security and must be considered in designing agricultural trade policies and insurance systems.
Highlights
Agricultural production is highly influenced by climate conditions [1]; climate change may add volatility to agricultural production due to crop failures [2,3] or too abundant harvests [4]
In addition to an increase in fluctuation of climate conditions in many regions estimated by global climate model (GCM), crop-yield changes became more sensitive to changes in climate conditions
Such tendency led to simultaneous crop failures in many regions
Summary
Agricultural production is highly influenced by climate conditions [1]; climate change may add volatility to agricultural production due to crop failures [2,3] or too abundant harvests [4]. Simultaneous crop failures and abundant harvests would enhance synchronized yield change (SYC) for major grains and increase global imbalances in food supply and demand, resulting in extremely volatile agricultural prices [5]. Headey and Fan [8] stated that the rise in agricultural prices in 2007 was strongly influenced by factors other than the supply–demand balance in the food market, and that the impact of supply shocks caused by climate change was relatively small. They could not ignore climate shocks as a causative factor. Based on these previous findings, it is useful to apply analytical methods that consider supply and demand in the food market in any analysis of agricultural price volatility
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