IMPACT OF CLIMATE CHANGE ON THE NET REVENUE OF MAJOR CROP GROWING FARMERS IN PAKISTAN: A RICARDIAN APPROACH

Abstract

Climate change has severely affected the crops’ productivity during the last few decades across the agrarian economies of the world, thereby resulting in a considerable loss per farmer in the yearly net revenue. Pakistan’s agriculture is sensitive to warming and it experienced an adverse effect in the net farm revenue (NFR). This study primarily predicts the adverse climate effects and estimates the NFR of the farmers of five major crops (wheat, rice, cotton, sugarcane and maize) in two different seasons, winter (Rabbi) and summer (Kharif), in Pakistan. This study is based upon the secondary cross-sectional data [Household Integrated Economic Survey of Pakistan (HIES), 2015–2016] along with the time series data regarding climatic variables from 1981 to 2016. A well-established Ricardian approach has been employed to test the association between net revenue of the farmer and climatic variability. Results of overall study conclude that increases in average summer (winter) temperature and average winter (summer) rainfall have adverse (favorable) impacts on all of the crops’ productivity during both seasons, winter (Rabbi) and summer (Kharif), in Pakistan, thus leading to a decline (an increase) in NFR. Future increases in temperature will be harmful and may lead to significant loss in the revenue amount. The analysis of adaptation techniques exhibits beneficial impacts on the NFR and it is concluded that adaptations are helpful tool for the farmers to minimize revenue loss.