Profit-maximizing responses to climate change in commodity agriculture: Does adaptation matter?

Sajeev Erangu Purath Mohankumar, Purdue University

Abstract

Accumulation of greenhouse gases in the atmosphere has led to rising temperatures, and is expected to lead to a change in climate. Crop yields are vulnerable to these changes. Adaptation is expected to be key to combating climate change impacts, but the effectiveness of adaptation strategies is not well understood. Hence, there is a need to assess the impacts of climate change on agriculture and devise profitable adaptation strategies to combat its effects. This study uses historical and three projected climate data sets to simulate yields using the crop model Daycent, empirical relationships between weather and agronomic variables that influence farm management decisions, and a linear optimization model (Purdue Crop/Livestock Linear Program, PCLP-GAMS) to: 1) Provide an integrated assessment of the farm-level impacts of climate change; 2) Identify farm-level adaptation practices and estimate their cost; and 3) Solve for profit-maximizing crop rotations and management adaptations. This approach is applied to a representative corn and soybean farm for a case study located outside Rensselaer, Indiana The extent and direction of climate change impacts depend on climate projections and crops. The NCAR projection is associated with an increase in corn yields into the future whereas GFDL and UKMO projections lead to a decrease in corn yield. Soybean yields increase for all future projections. Among the adaptation practices considered, irrigation, split application of fertilizer, rotating corn with soybeans and switching to continuous no-till were found to have a positive influence on corn yield. Soybean yields, although affected by a changing climate, do not respond to the adaptation practices simulated. Economic optimization results suggest that there is the potential to slightly increase net income with the adoption of some adaptation practices investigated in the 2041-2070 mid-century period. The study provides a holistic framework to analyze the agronomic and economic impacts of climate change and associated adaptation practices that are more complete than previous research. The results are helpful for farmers, crop advisors and policy makers struggling to understand the impact of a changing climate on commodity agriculture and identify economically viable adaptation strategies.

Degree

M.S.

Advisors

Gramig, Purdue University.

Subject Area

Climate Change|Environmental economics|Agricultural economics

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