Endogenous Irrigation: The Impact of Climate Change on Farmers in Africa

25 Pages Posted: 20 Apr 2016

See all articles by Pradeep Kurukulasuriya

Pradeep Kurukulasuriya

United Nations Development Programme; Yale University - School of Forestry and Environmental Studies

Robert O. Mendelsohn

Yale University - School of Forestry & Environmental Studies; Yale University

Date Written: July 1, 2007

Abstract

Previous Ricardian analyses of agriculture have either omitted irrigation or treated irrigation as though it is exogenous. In practice, it is a choice by farmers that is sensitive to climate. This paper develops a choice model of irrigation in the context of a Ricardian model of cropland. The authors examine how climate affects the decision to use irrigation and then how climate affects the net revenues of dryland and irrigated land. This Ricardian 'selection' model, using a modified Heckman model, is then estimated across 8,400 farmers in Africa. The analysis explicitly models irrigation but controls for the endogeneity of irrigation. The authors find that the choice of irrigation is sensitive to both temperature and precipitation. Simulations of the welfare impacts of several climate scenarios demonstrate that a model which assumes irrigation is exogenous provides a biased estimate of the welfare effects of climate change. If dryland and irrigation are to be estimated separately in the Ricardian model, irrigation must be modeled endogenously. The results also indicate that African agriculture is sensitive to climate change. Many farmers in Africa will experience net revenue losses from warming. Irrigated farms, on the other hand, are more resilient to temperature change and, on the margin, are likely to realize slight gains in productivity. But any reduction in precipitation will be especially deleterious to dryland farmers, generally the poorest segment of the agriculture community. The results indicate that irrigation is an effective adaptation against loss of rainfall and higher temperatures provided there is sufficient water available. This will be an effective remedy in select regions of Africa with water. However, for many regions there is no available surface water, so that warming scenarios with reduced rainfall are particularly deleterious.

Keywords: Climate Change, Environmental Economics & Policies, Water Supply and Systems, Water Resources Assessment, Global Environment Facility

Suggested Citation

Kurukulasuriya, Pradeep and Mendelsohn, Robert O., Endogenous Irrigation: The Impact of Climate Change on Farmers in Africa (July 1, 2007). World Bank Policy Research Working Paper No. 4278. Available at SSRN: https://ssrn.com/abstract=999488

Pradeep Kurukulasuriya (Contact Author)

United Nations Development Programme ( email )

New York, NY 10017
United States
2129066843 (Phone)

Yale University - School of Forestry and Environmental Studies ( email )

New Haven, CT 06511
United States

Robert O. Mendelsohn

Yale University - School of Forestry & Environmental Studies ( email )

195 Prospect Street
New Haven, CT 06511
United States

Yale University ( email )

New Haven, CT 06520
United States
2034325128 (Phone)

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