Examining the Economic Impacts of Climate Change on Net Crop Income in the Ethiopian Nile Basin: A Ricardian Fixed Effect Approach

Abstract

Climate change affects crop production by distorting the indestructible productive power of the land. The objective of this study is to examine the economic impacts of climate change on net crop income in Nile Basin Ethiopia using a Ricardian fixed effect approach employing the International Food Policy Research Institute (IFPRI) household survey data for Ethiopia in 2015 and 2016. The survey samples were obtained through a three-stage stratified sampling technique from the five regions (Amhara, Tigray, Benishangul Gumuz, Oromia, and Southern Nation Nationality and People (SNNP) along the Nile basin Ethiopia. There are only 12–14% female household heads while there are 80–86% male households in the regions under study. In the regions, more than half of (64%) the household heads are illiterate and almost only one-tenth of them (12%) had received remittance from abroad from their relatives or children. Crop variety adoption rate is minimal, adopted by the 31% of farmers. Only 30% of the surveyed farmers mentioned that they planted their crop seeds in row whereas the rest 70% had not applied this method. The regression results from the fixed effect least square dummy variable model showed that literacy, household size, remittance, asset value, and total land holdings have significant and positive impacts on the net crop income per hectare. The regional dummy variables estimate indicated that all the regions are negatively affected by climate change at varying levels. Strategies to climate change adaptation have significant and positive contributions in leveraging the damaging effects of climate change. The results also showed that increased winter and summer temperature and rainfall increase net crop income per hectare. The estimated coefficient of the interaction term of spring temperature and rainfall is significant and negative. On the other hand, while the mean annual temperature is damaging to crops, annual rainfall is beneficial. It can be deduced that, while increased temperature and rainfall in summer and winter increase the net crop income, the converse is true for winter and spring seasons. The study also proposes a specific, context-dependent, farm-level adaptation analysis of how farmers cope with the different climatic impacts of the Nile Basin and maintain the income levels that they have previously enjoyed.

Nature Based Climate Change Adaptation Measures for Sustainable Crops Production in Ethiopia: Review

“…However, [27] found that climate change will probably have only relatively small effects on the average yields of maize, wheat, and sorghum in Ethiopia in 2035 and even in 2055. [28] illustrate that Ethiopian Nile Basins are negatively affected by climate change at varying levels. The higher increase in growing season temperatures combined with high inter-annual and intraseasonal variability of rainfall adversely affect crop production [20].…”

An assessment of the impact of climate on wheat yield in Indo-Gangetic plain region of India: A panel data analysis

“…In India, agriculture and allied activities contributed about 18.3 percent of total gross value added (GVA) in 2022-23 (Press Information Bureau, 2023. The climate change and global warming has impacted the different crops differently (Baylie and Fogarassy, 2021).Wheat is one of the most consumed food crops in India as well as globally. Wheat ensures food security in India specifically the northern part of the country.…”

“…In India, agriculture and allied activities contributed about 18.3 percent of total gross value added (GVA) in 2022-23 (Press Information Bureau, 2023. The climate change and global warming has impacted the different crops differently (Baylie and Fogarassy, 2021).…”