Background: Smallholder farmers are one of the most vulnerable groups to climate change, yet efforts to support farmer adaptation are hindered by the lack of information on how they are experiencing and responding to climate change. More information is needed on how different types of smallholder farmers vary in their perceptions and responses to climate change, and how to tailor adaptation programs to different smallholder farmer contexts. We surveyed 860 smallholder coffee and basic grain (maize/bean) farmers across six Central American landscapes to understand farmer perceptions of climate change and the impacts they are experiencing, how they are changing their agricultural systems in response to climate change, and their adaptation needs.Results: Almost all (95%) of the surveyed smallholder farmers have observed climate change, and most are already experiencing impacts of rising temperatures, unpredictable rainfall and extreme weather events on crop yields, pest and disease incidence, income generation and, in some cases, food security. For example, 87% of maize farmers and 66% of coffee farmers reported negative impacts of climate change on crop production, and 32% of all smallholder farmers reported food insecurity following extreme weather events. Of the farmers perceiving changes in climate, 46% indicated that they had changed their farming practices in response to climate change, with the most common adaptation measure being the planting of trees. There was significant heterogeneity among farmers in the severity of climate change impacts, their responses to these impacts, and their adaptation needs. This heterogeneity likely reflects the wide diversity of socioeconomic and biophysical contexts across smallholder farms and landscapes. Conclusions:Our study demonstrates that climate change is already having significant adverse impacts on smallholder coffee and basic grain farmers across the Central American region. There is an urgent need for governments, donors and practitioners to ramp up efforts to help smallholder farmers cope with existing climate impacts and build resiliency to future changes. Our results also highlight the importance of tailoring of climate adaptation policies and programs to the diverse socioeconomic conditions, biophysical contexts, and climatic stresses that smallholder farmers face.

Because of scale effects, idea-based growth models have the counterfactual implication that larger countries should be much richer than smaller ones. New trade models share this same problematic feature: although small countries gain more from trade than large ones, this is not strong enough to offset the underlying scale effects. In fact, new trade models exhibit other counterfactual implications associated with scale effects -in particular, domestic trade shares and relative income levels increase too steeply with country size. We argue that these implications are largely a result of the standard assumption that countries are fully integrated domestically, as if they were a single dot in space. We depart from this assumption by treating countries as collections of regions that face positive costs to trade amongst themselves. The resulting model is largely consistent with the data. For example, for a small and rich country like Denmark, our calibrated model implies a real per-capita income of 81 percent the United States's, much closer to the data (94 percent) than the trade model with no domestic frictions (40 percent).

Because of scale effects, idea-based growth models imply that larger countries should be much richer than smaller ones. New trade models share the same counterfactual feature. In fact, new trade models exhibit other counterfactual implications associated with scale effects: import shares decrease and relative income levels increase too steeply with country size. We argue that these implications are largely a result of the standard assumption that countries are fully integrated domestically. We depart from this assumption by treating countries as collections of regions that face positive costs to trade among themselves. The resulting model is largely consistent with the data. (JEL F11, F14, F43, O47, R12)

To ensure food security among rural communities under a changing climate, policymakers need information on the prevalence and determinants of food insecurity, the role of extreme weather events in exacerbating food insecurity, and the strategies that farmers use to cope with food insecurity. Using household surveys in Guatemala and Honduras, we explore the prevalence of food insecurity among smallholder farmers on both a recurrent (seasonal) and episodic (resulting from extreme weather events) basis, analyze the factors associated with both types of food insecurity, and document farmer coping strategies. Of the 439 households surveyed, 56% experienced recurrent food insecurity, 36% experienced episodic food insecurity due to extreme weather events, and 24% experienced both types. Food insecurity among smallholder farmers was correlated with sociodemographic factors (e.g., age, education, migration) and asset ownership. The factors affecting food insecurity differed between type and prevalence of food insecurity. Our results highlight the urgent need for policies and programs to help smallholder farmers improve their overall food security and resilience to extreme weather shocks. Such policies should focus on enhancing farmer education levels, securing land tenure, empowering women, promoting generational knowledge exchange, and providing emergency food support in the lean season or following extreme weather events.