Impacts of climate change on Brazilian agriculture: an analysis of irrigation as an adaptation strategy

Dênis Da Cunha

No 201239, Working Papers from Latin American and Caribbean Environmental Economics Program

Abstract: This paper aims to analyze the effects of climate change on Brazilian agriculture, considering irrigation adoption as an adaptation strategy. Investigation into how climatic variability influences irrigation adoption was performed, as well as tests to determine whether this adaptation measure actually reduces producers’ vulnerability to climate change. We estimate a simultaneous equations model with endogenous switching to account for the heterogeneity in the decision to adapt or not, and to account for unobservable characteristics of farmers and their farm. We compare the expected land values under the actual and counterfactual cases that the farm household adapted or not to climate change. Temperature and precipitation projections for the period of 2010-2099 were used, considering different climate scenarios, according to the Fourth Assessment Report of the IPCC. Simulation results showed that irrigation could can be a very effective tool for counteracting the harmful effects of climate change. Land values for irrigated production are less vulnerable than those of rainfed production. Farmers’ income tends to increase from lands where irrigation techniques are practiced, while from those where agricultural production is exclusively rainfed, losses can observed in relation to the current period. These conclusions confirm the need to invest in adaptation strategies in order to make Brazil ready to cope with the adverse effects of global climate change..

Pages: 29 pages
Date: 2012, Revised 2012
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