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Tuesday, 6th 2021

François Bareille will present "Decomposing Weather Impacts on Crop Profits" co-author Raja Chakir.

Abstract: 

The costs of climate change on agriculture depends critically on farmers' adaptation. In this paper, we investigate how farmers adapt their input mix in response to weather fluctuations during the growing season using individual panel data from Meuse (France) between 2006 and 2012. Specifically, we estimate structural models of profit-maximizer farmers with crop-specific yields and input-specific demand functions, conditionally on farm and year fixed effects. The results show that climate change affects crop yields but that farmers adapt their fertilizers and pesticides applications to limit the negative impacts. The effects are heterogeneous among crops and inputs. Temperatures and precipitations affect also the inputs productivity and reduce the substitution between the inputs. Overall, we find that farmers' profits in Meuse will reduce under a RCP 4.5 scenario, principally due to a direct effect on plant growth. Society could however benefit from adaptation as the reduction in damages due non-point source pollution represent twice the private costs bared by the farmers.