Impact of climate on tea yield: an empirical investigation from Sri Lanka

Agriculture is heavily climate dependent. Tea cultivation is of no exception. Tea is cultivated in many developing nations around the globe and the climate change impact is to be mostly felt by developing nations in comparison to the developed. In countries such as Sri Lanka, where the major portion of export earning from agriculture comes from the tea industry, the climate change impacts would harm its progress. Hence, understanding how climate has been linked with production would pave the way for development of a country specific policy. To this end, this research attempted to measure the long-run relationship of the climate with the yield per hectare, using monthly data from 2005 to 2019. A panel Autoregressive Distributed Lag model (ARDL) was used to obtain long-run cointegration between minimum and maximum temperatures and the amount of rainfall received. Data on production and input variables were obtained from records kept at 37 large-scale tea estates at monthly intervals. Monthly temperature and rainfall data were obtained from the Meteorological Department of Sri Lanka. Panel cointegration tests indicated that there is a coexisting long-run relationship between climate variables and the tea yield. Maximum temperature had a positive relationship with yield, but minimum temperature shows a long-run negative relationship. Rainfall is positively related. Production inputs show a long-run positive impact. Thus, the possible negative impacts of rising minimum temperature could be overcome if proper management practices are adopted in the long-run.