Asymmetric effects of rainfall on food crop prices: evidence from Rwanda

Abstract

This study examined the effects of the likely change in rainfall on food crop prices in Rwanda, a landlocked country where agriculture is mainly rain-fed. The empirical investigation is based on nonlinear autoregressive distributed lag cointegration framework, which incorporates an error correction mechanism and allows estimation of asymmetric longrun and short-run dynamic coefficients. The results suggest that food crop prices are vulnerable to rainfall shocks and that the effect is asymmetric in both the short and long run. Moreover, there was evidence of seasonal differences, with prices falling during harvest season and rising thereafter. Considering the ongoing threat of global climate change, and in order to cope with rainfall shortage and uncertainty, increase food affordability and ultimately ensure food security throughout the year, there is a need to develop and distribute food crop varieties and crop technologies that reduce the vulnerability of farming to rainfall shocks.

Does Climate Change Asymmetrically Affect Rice Productivity In India? New Insight From NARDL Cointegration Approach

“…Furthermore, the result also infers that there is the asymmetrical association between rice productivity and rainfall in the short-run in India. This result is supported by the Nsabimana & Habimana (2017), which explained that rainfall has an asymmetric impact on agriculture productivity, and deficiency of rainfall has negatively affected agriculture yields and its revenue. Apart from, Mitra (2014) contradicted this result and concluded that no asymmetrical relationship between rainfall and food grain production.…”

“…In contrast, Pal & Mitra (2018) explain that coefficient of rainfall has a greater impact on the production of food grain up to 75 th quantile and reduce after that in India. While Nsabimana & Habimana (2017) conducted a study in Rwanda's context, they stated that rainfall has an asymmetric impact on the price of crop in the short and long-run. Moreover, the price of food crop has gone down in the season of harvest, and after that, it has been increasing.…”

The Impact of Climate Change on Select Agricultural Production in a Water Scarce Country

“…Given that the use of sprinkler and micro-irrigation systems can be conducive to the application of fertilisers and pesticides, the positive association suggest that the use of pesticides and fertilisers in the earlier stages of the crop life-cycle in conjunction with these watering systems is recommended. Nsabimana and Habimana (2017), also suggested that it is essential to adopt climate adaptation strategies in the agriculture sector and to provide farmers with improved seeds that can resist rainfall shortages. This is consistent with an earlier recommendation by Olayide et al (2016) who noted that the impact of climate-induced agricultural production risks can be mitigated through the adoption of Climate Smart Agricultural (CSA) practices, which involve the development of arable land for irrigation systems.…”

“…There are also inflationary effects to consider, which fall under the welfare considerations discussed by Vermeulen et al (2012), particularly when there are large and sustained disruptions to domestic agriculture output. The presence of asymmetric effects 1 has also been documented by Nsabimana and Habimana (2017), in relation to the price outcomes of agriculture output, where negative shocks in rainfall had a substantially greater and more persistent impact on crop prices than positive shocks. Heterogeneous influences were also noted across crop types, with negative shocks being generally more persistent regarding the impact on the price of cassava and beans, relative to potatoes.…”

Impact of Trade Openness and Climate Change on Food Productivity in Nigeria

“…a 0 is a constant while a 1 -a 3 are the model parameters and ε t is the error term. The use of rainfall variability is important, especially in developing countries where irrigation and mechanised systems are not fully developed (Nsabimana & Habimana, 2017). Blanc (2012) shows that the unexpected variability of temperature and rainfall in sub-Saharan Africa exerts a negative impact on crop production.…”