DRAFT FOR DISCUSSION

Transcription

1 DRAFT FOR DISCUSSION Climate Change and Agriculture The Former Yugoslav Republic of Macedonia Country Note May 2010 This Country Note briefly summarizes information relevant to both climate change and agriculture in Macedonia, with a focus on policy development and institutional involvement a. Climate Change Exposure and Risk for Macedonia The importance of agriculture to rural livelihoods in Macedonia is clear with more than 19% of the population employed in agriculture and 12% of the country s GDP derived from the sector. Agriculture is a highly climate sensitive sector, and as such, much of Macedonia s rural population and their livelihoods are vulnerable to climate change. Historical data indicate that Macedonia is characterized by a highly variable climate that has already experienced an increase in mean temperature, moisture deficits, and the severity of extreme events like drought, heatwaves, and forest fires 1. Climate projections for the future indicate, on average, that Macedonia will be exposed to 2,3,4 : A 1.9 o C increase in mean annual temperature by 2050, with the greatest warming projected to occur in summer (2.5 o C increase). A decline in mean annual precipitation by 5% by 2050, with a decline in mean precipitation for summer of 17%. A more marginal and risky agricultural production environment, as increases in temperatures and reduced precipitation during critical crop and pasture growth periods will exacerbate the already significant crop moisture deficit, especially during summer. An increased exposure to new pests and diseases for agricultural crops, forests and livestock due to changes in the temperature and precipitation regime. An increased length of growing season providing opportunities in some areas for new crops, increased productivity and changes to cropping patterns. Figure 1: Macedonia and South Eastern Europe Figure 2: Macedonia Vulnerability Indicators Source: Acknowledgements: This Country Note was produced by a World Bank team led by William Sutton, comprising Jitendra Srivastava, Brendan Lynch and Biljana Dzartova-Petrovska (SIDA Macedonia) under ECSSD Sector Manager Dina Umali-Deininger. Funding was provided by TFESSD and BNPP. Note: Employment in agriculture (% of total employment)*; Rainfed cropping (% of cropland)*; Water usage in agriculture (% of total annual freshwater extraction)**; Uninsured cropland (Estimate); Soil degradation (% of total land)***; Risk of extreme weather events (additional 1:20 year events Vs )****; Share of food % of total expenditures *****; GDP from Agriculture*; Rural population below $5/day*****; Sources: *World Development Indicators 2008; ** EarthTrends 2003, *** FAO AGL 2005; **** Baettig, M. et al., ***** ECA Databank. ^ECA statistics come from transitions and developing economies of Eastern Europe and Central Asia, where available a Note that The Former Yugoslav Republic of Macedonia will be referred to as Macedonia in the interest of conciseness.

2 What should be done? Macedonia should confront its climate opportunities, risks and vulnerabilities in a proactive way by developing a range of localized adaptation options at various management scales. With limited finances, it is imperative that adaptation options that give the greatest return on investment from an economic, social, and environmental perspective be prioritized and implemented via climate change adaptation action plans to increase the resilience of agricultural systems and rural livelihoods to climate change. This could include, for example, policies and investments to enhance natural resource management and increase research, development, and extension of new varieties and improved techniques (e.g. appropriate land use, conservation agriculture, improved water use efficiency, and sustainable forest and pasture management). However, these strategies and investments need to be adapted for a variety of farming systems and agroecological zones to ensure their relevance and adoption at a local scale. As a first step, an analysis of the exposure and sensitivity of existing agricultural systems in Macedonia from a physical, economic and social perspective should be undertaken to project the potential impacts on the agricultural sector from climate change. Methodological approaches and outcomes of existing studies should be reviewed and possible information gaps filled by new analysis. Combined with an assessment of the country s existing adaptive capacity, this will provide a baseline estimate of vulnerability in the agricultural sector. This assessment should be undertaken at the agro-ecological zone scale to identify the most vulnerable regions and production systems. Once a baseline is established, different adaptation options can be explored for reducing the exposure and sensitivity of agricultural production systems in order to decrease vulnerability and in some cases to exploit new opportunities. Although many adaptation options have already been recommended by recent studies, a deeper analysis is now needed in order to assure that measures are well suited to the different agro-ecological zones, and to prioritize investments. This could be done using a combination of approaches, including cost-benefit analysis, sensitivity analysis and multi-criteria decision analysis. Potential barriers to adaptation should also be assessed, including policy, economic, institutional, technological, educational, cultural, environmental, and political factors, as well as the capacity of local- and national-level institutions and agricultural producers to implement and adopt adaptation options. As a result, a Menu of Climate Change Adaptation Options for Agriculture should be developed that identifies priorities for investments, capacity development and policy improvement. These options should be practical and operational, with a focus on actions that improve resilience and increase productivity (i.e. win-win ), and where possible also have mitigation benefits (i.e. win-win-win ). 1. Introduction The Europe and Central Asia (ECA) Region of the World Bank recently released a new report titled Managing Uncertainty: Adapting to Climate Change in Europe and Central Asia. 5 The report is a flagship document that raises awareness of the threats, challenges and opportunities that ECA countries and communities will face in adapting to climate change across a variety of economic sectors. This Country Note was developed as a basis for beginning work in Macedonia under a World Bank regional program to enhance the ability of ECA countries to integrate climate change adaptation into agricultural policies, programs, and investments. 6 Agriculture is of significant importance to Macedonia, in terms of employment, rural livelihoods, food security, and exports. However, the sector is highly climate sensitive and potential adverse changes in temperature, precipitation and the frequency of extreme events (e.g. droughts, heat waves, floods, forest fires) are likely to exacerbate existing inequalities between the rich and the more vulnerable poor populations. This deterioration will place a strain on institutions, food supply and rural growth. Additionally the country s weak financial position and institutional capacity to respond to natural climatic hazards also poses a threat to future sustainable agricultural production and rural development. Figure 2 displays nine climate change vulnerability indicators and compares Macedonia to the Europe and Central Asia (ECA) Region average for transition economies. For a number of indicators, agriculture and rural livelihoods in Macedonia appear to be equal to or less vulnerable than the ECA average to climate change. However, three categories where Macedonia appears more vulnerable than other countries in the region are for soil degradation, the percentage of GDP derived from agriculture and the share of food as a percentage of total household expenditure. When compared to high income European countries (for categories where figures are available), the differences in vulnerability to climate change are stark, with high income European countries having an average of just 4.5% of the population employed in agriculture as opposed 19.4% in Macedonia, whilst the average GDP derived from agriculture for high income European countries is significantly lower at only 2%, compared to 12% in Macedonia Geography Macedonia is a landlocked country located in south-eastern Europe, surrounded by Albania, Kosovo, Serbia, Bulgaria and Greece. Administratively, Macedonia is divided into 84 local municipalities, although for statistical purposes the country is 2

3 divided into 8 major regions 8. The country has a surface area of 25,713km 2, with 79% of the area comprising hills and mountainous terrain, whilst plains and water surfaces account for 19.1% and 1.9%, respectively 9. About 50% of the territory is used for agricultural production while approximately 37% is covered by forests 10. The water resources of Macedonia are primarily provided by the Vardar river and its tributaries, with 98% of the country s surface area in transboundary river watersheds 11. The terrain of Macedonia is identified by its rich agricultural valley s and plains, which occupy 19.1% of the territory and hilly and mountainous terrain, which occupies 79.1% of the territory 12. Approximately 44% of the country is situated at an elevation of between 500 and 1000m above sea level, with the highest peak of the country (Golem Korab) standing at 2,764m Demography The population of Macedonia is estimated to be 2.0 million (2007), with 34% of the population living in rural areas 14. Between 1990 and 2007 the total population has increased at an average annual growth rate of 0.4%, although for the same time period the rural population has declined at an annual rate of 1% 15. One of the drivers for this declining rural population is the migration from rural areas of younger segments of the population, from marginal agricultural areas. This phenomenon results in a more vulnerable rural population as a greater proportion of individuals remaining are from older age groups with less physical capacity and higher sensitivity to extreme events. The life expectancy at birth as of 2007 was 74 years 16. This is below the life expectancy of high-income European countries, which is 80 years, although greater than the ECA Region average of 70 years Agriculture Agriculture in the form of cropland and pastures is a significant land use and occupies approximately 50% of the surface area of Macedonia (see Figure 3). The vast majority of cropland in the country is rainfed, with the estimated area of irrigated cropland less than 10% 18. With the exception of western parts of the country, water deficiencies occur during the summer season and result in significant moisture stress for summer and annual crops. In an average year evapo-transpiration is higher than rainfall, resulting in crop water deficits of approximately 250mm in western areas and 450mm in eastern areas 19. Such high levels of moisture stress adversely impact crop production and quality and make reliable, cost-effective and timely irrigation almost a necessity for the production of competitive high value summer and perennial crops 20. The area planted in 2007 for the production of a variety of crops in Macedonia is displayed in Figure 4. By area, wheat is clearly the major annual crop grown, with smaller areas occupied by barley, maize and a range of vegetable crops, whilst grapes are the main perennial crops and occupy close to 25,000ha 21. Further. Although the area occupied by fruit and nut trees is relatively small, there is scope and potential to expand this area into the future. As most crop production is rainfed, there can be significant changes in the crop area and mix planted on a year-to-year basis, depending on the timing and quantity of rainfall and associated extreme events, like drought and flood 22. In terms of certified organic agriculture production, figures from 2006 indicate that a mere 500 hectares across approximately 100 farms were under an organic farming system in Macedonia 23. Presently, the major organic crops grown are cereals, with smaller areas of high value organic fruits, vegetables and nuts 24. Given the increasing demand for organic produce and the suitability of cropland in Macedonia there is significant scope for expansion of the organic agriculture sector, especially high-value horticulture crops. Projected changes in climate, including increased temperatures, decreased precipitation and an increase in the number of extreme events, pose a serious risk to agricultural production, water availability, food security and economic growth for rural livelihoods in Macedonia. Across the country there will be a significant variation in vulnerability and associated adaptive capacity depending on a range of factors, including the current climatic exposure, social structures, institutional capacity, knowledge and education, and access to infrastructure. Areas that are already under marginal rain-fed production will be at increasing risk, whilst communities in relatively high rainfall or irrigated areas will have more adaptation options to buffer their production systems against projected changes in climate. In some instances, there could also be potential opportunities to increase production as a result of climate change at least in the short-term that could be taken advantage of if appropriate measures are put in place. 3

4 Figure 3: Macedonia Land Use Source: Figure 4: Area Planted by Crop in Macedonia, 2007 Source: State Statistical Office of the Republic of Macedonia, Census of Agriculture, 2007, Skopje. 4.1 Agriculture and the Adaptation Deficit The sensitivity of the agriculture sector to the climate has important implications in Macedonia. With a significant proportion of the rural population poor and dependent on the agricultural sector for their livelihood, rural communities are vulnerable and at risk from any changes that occur as a result of climate change 25. This risk is further exacerbated by the relatively low productivity associated with a lack of adaptive capacity to the present climate, also known as the adaptation deficit. This is best illustrated by a comparison of wheat yields from other countries in the region, as displayed in Figure 5. For example, the average wheat yield between for Macedonia was just 82% and 61% of Serbia and the EU-27 countries, respectively 26. This underperformance can be attributed to a complex set of factors, including distortions and imperfections in agricultural output and input markets; poor quality public services in areas like agricultural education, extension, research, and market information systems; delays in farm restructuring and undeveloped agricultural land markets; lack of access to finance; unsustainable management of soils; insufficient irrigation; and high vulnerability to natural hazards like droughts, floods, frosts, and severe storms 2728 The challenges created by this unfavorable environment for agriculture will increase significantly as a result of climate change. It is therefore fundamental that action should be taken to address the adaptation deficit as part of any climate change adaptation strategy. 4

5 Figure 5: Comparative Average Wheat Yields, b Source: 5. Forestry Forests cover 37% of the country and play an important role in watershed protection and by providing a number of economic and ecological benefits to rural communities, such as fuel-wood and non-wood products 29. These benefits belie the fact that the forestry sector contributes only a small fraction of GDP 30. Some of the main challenges facing the forestry sector are poor management and governance, illegal logging, increasing impacts of pests and diseases and the frequency and severity of forest fires which have affected nearly 100,000 ha of forest in the last decade 31. From , forest fires resulted in EUR 28 Million of total economic loss and the burning of almost 60,000 ha of forest 32. Then in 2007, a severe heatwave combined with the highest temperatures ever recorded and extended dry conditions resulted in a significant shift in the fire risk for the country and resulted in forest fires affecting more than 40,000 ha 33. The collective impact of forest fires over the last decade and the unprecedented conditions experienced in 2007 highlight the significant vulnerability Macedonian forests and associated ecosystems have to the projected changes in climate. 6. Agriculture and the Economy The economy of Macedonia has gone through a significant transition since achieving independence in GDP declined from at an average annual rate of -0.8%, however from this trend was reversed and Macedonia experienced a moderate average annual growth rate of 2.7% 34. GDP for 2007 was US$ 7.7 billion, whilst GNI per capita was US$ 3, Beginning the fall of 2008, Macedonia, along with most other countries in the world, was severely affected by the global financial crisis. Macedonia s economy is forecast to contract by 1 to 1.5% in 2009, with the country returning to a positive 2% GDP growth rate in Agriculture has traditionally been a significant and relatively stable contributor to the Macedonian economy since independence in Despite structural and non-structural changes to the agriculture sector post-independence, agricultural GDP increased marginally at an average annual rate of 0.2% from The sector further expanded from at an average annual rate of 1.3% 38. Although the sector has grown, the share of GDP has declined marginally from 13% to 12% between 1995 and 2007, as other sectors of the economy like services have grown at a faster pace. 39. However, when the agriculture sector is combined with the agro-processing sector, the importance of agriculture to the Macedonian economy increases to 16% of GDP 40, although it is clear that there is potential for greater value adding in the sector. Furthermore, the agriculture sector provides almost 20% of total employment and rural areas are home to over a third of the population. These figures highlight the inherent vulnerability of the national economy to climate related events that impact the agriculture sector. This level of vulnerability is further compounded at a livelihoods scale as 36.3% of the rural population earn less than $5/day and are highly vulnerable to any changes in agricultural income 41. b The average wheat yield for Serbia includes for 2005 the average wheat yield for Serbia and Montenegro. 5

6 The export and import of food products is considered an important food security and vulnerability indicator for both rural livelihoods and the performance of the agricultural sector. Based on the merchandise value of food products, Macedonia imports significantly more products than it exports. In 2007, the value of food exports was US $469.8 million, whilst the value of food imports was US $627.4 million 42. This food merchandise trade deficit has stayed relatively constant in percentage terms since 1995, however in value terms both food merchandise imports and exports have grown substantially and indicate a robust and competitive agricultural sector. The major agricultural exports as of 2004 were tobacco, beverages (mostly wine and mineral water), fresh and processed vegetables, and lamb, whilst the major imports were fresh and processed meats, cereals, animal and vegetable fats and coffee, tea and spices 43. This pattern of trade exporting labor-intensive products and importing land-intensive products appears to correspond with the country s comparative advantage as a land constrained country with an abundant labor force 44. At the commodity level, grapes, cow milk, tobacco, chillies and peppers, wheat, apples and tomatoes made the most significant contribution to the average value of agricultural production in Macedonia from (Figure 6). Although field crops like wheat, barley and maize are grown extensively and occupy a large percentage of the cropping land (figure 4), their contribution by value is significantly less than the contribution made by grapes, tobacco and the combined value of various fruits and vegetables, which garner a higher price 45. Figure 6: Average Value of Agricultural Production by Commodity, c Source: Adapted from In terms of European Union (EU) accession, since 2005 Macedonia has been a candidate country on the accession pathway 46. Accession to the EU has been a high priority for the country, with the government having a strong focus on developing and implementing required EU reforms. This includes the work being undertaken with the World Bank via the Agriculture Strengthening and Accession Project 47. In October 2009, the European Commission recommended that accession negotiations for fully-fledged EU membership commence with the government of Macedonia, due to the progress made on the EU reform agenda 48. However, for these negotiations to commence, all 27 EU member countries must be in agreement with Macedonia s entry into the EU. 7. Agriculture and the Environment Agri-environmental management has implications for the resilience of agriculture to climate change. The most significant impacts Macedonian agriculture has on the environment are associated with soil degradation; waterlogging and salinization as a result of unsustainable agricultural practices and land use; poor water management; and biodiversity degradation 49. All of these issues adversely affect the natural resource base of the country and increase the vulnerability of agricultural systems and rural livelihoods to external shocks, like climate change. Soil erosion is a significant problem across vast areas of the country, primarily as a result of poor land management. Approximately 48% of the country is impacted by severe or very severe rates of erosion, 50. Although erosion is a natural process as a result of steep slopes, climate, land cover patterns and soil properties, human factors such as poor cultivation c Data was missing for the value of maize production between As an approximate guide, total maize production by quantity over this period was 49% of total wheat production. 6

7 practices, overgrazing and deforestation have all combined to accelerate the rate of this process and contributed more broadly to land degradation across the country 51. Poor agricultural practices at the farm level including irregular crop rotations, burning of crop residues and poor fertility management also combine with the impacts of soil erosion and result in significant soil degradation 52. Additionally, high rates of erosion have also resulted in the pollution of waterways and adversely impacted the function of reservoirs and irrigation infrastructure 53. In the irrigation sector, poor on-farm irrigation system design, inefficient application practices and inadequately maintained irrigation system infrastructure results in widespread waterlogging and salinization 54. This adversely impacts both short- and long-term agricultural productivity on affected lands, and wastes precious water resources that could be otherwise utilized. It should be highlighted that many of the environmental problems caused by agriculture can be addressed concurrently by bridging the adaptation deficit to the current and projected future climate. This highlights the importance of integrating environmental sustainability into the climate change agenda whilst also leading to increased agriculture sector competitiveness, productivity and profitability. 8. Agro-Ecological Zones Macedonia can be divided into 8 climate types based on temperature, precipitation and elevation (see Figure 7). However, these 8 climate types can be consolidated broadly into three non-contiguous agro-ecological zones due to the underlying biophysical, climate and agricultural production systems of Macedonia. These zones are: The Alpine Zone comprising the alpine, sub-alpine, mountainous continental and sub-mountainous climate types (light green to dark green zones on the map); The Continental Zone comprising the hot and cold continental climate types (pink and green zones on the map); The Mediterranean Zone comprising the sub-mediterranean and continental sub-mediterranean climate types (dark and light orange zones on the map) ; Figure 7: Climate Types of Macedonia Source: Adapted from Ministry of Environment and Physical Planning, Second National Communication on Climate Change, The Republic of Macedonia, Skopje. A brief summary of each agro-ecological zone is outlined in Table 1: 7

8 Location description Table 1: Macedonia Agro-Ecological Zone Summary Parameter The Alpine Zone The Continental Zone The Mediterranean Zone The Alpine zone occupies the eastern and western border The Continental zone encompasses plateau areas areas of the country, with smaller areas on the southern adjacent the middle and lower Vardar river valley and border with Greece and in central-western areas of the transition zone areas to the Alpine zone. Elevation in this country. This zone occupies areas with elevation ranging zone ranges from 600-1,000m above sea level with the from 1,100 to greater than 2,250m above sea level. Given landscape transitioning from highland plains to undulating the terrain, and harsh climate large areas in this zone are hills and mountain slopes. affected by soil erosion. Soil Type Climatic Conditions and Hazards Agricultural Conditions Rural Poverty Rates Climate Change Implications The soils of this zone have highly variable physical, chemical and production properties, and are mainly comprised of compact silicate and carbonate substrates. with areas of acid brown forest soils. Annual mean temperatures range from 8.5ºC for the submountainous climate type to -0.4ºC for the higher elevation areas. Annual precipitation ranges from mm. The mean number of frost days ranges from days and the annual number of solar hours ranges from hours. The major climatic hazards include bush/forest fires during warm summers and untimely frosts. This zone includes deciduous forests (oak, beech), coniferous forests (white pine tree, spruce, ela, mountain pine) and pastures. The zone is best for summer grazing for livestock (mainly sheep) breeding and forestry as well as for extensive crop production, including oats, rye and potatoes (in lower areas of this zone where there is a lower erosion risk). The rural areas in this zone are underdeveloped with the highest poverty rates. The livelihoods of rural inhabitants in this zone mostly rely on extensive livestock production that barely provides for self-subsistence. Due to the low level of education and production farmers in this zone are most vulnerable and highly dependent on the climate conditions related to their livestock and crop production Increased risk of drought, flood, fire, heat waves, water scarcity and extreme events. Increased risk of agricultural pests, diseases and weeds. Increased risk of soil erosion and desertification. Increased risk of production shocks due to frosts on early flowering perennials. Crop area changes due to a decrease in optimal farming conditions. Longer growing season and potential to improve crop, fruit, pasture and livestock productivity. The soils in the southern parts of this zone are primarily cinnamon forest soils and regosols, whilst in northern areas and at higher elevations brown forest soils and luvisols dominate. Annual mean temperature ranges from 8.8ºC in the cold continental climate type to 11.8 ºC in the hot continental climate type. The mean number of yearly summer days (Tmax>25ºC) ranges from days. Annual precipitation ranges from 557mm (Prilep) up to 890mm (Debar), although the majority of the zone ranges from 550mm 630mm. The mean number of frost days ranges from approximately days and the annual number of solar hours ranges from This zone is highly diverse and includes the main regions for cereal production, as well as areas for fruit growing, vegetable production and intensive livestock production and breeding. This zone also includes areas of oak and pine forests, although extensive clearing of forested lands was undertaken to create more arable land and/or to provide more pastures for grazing. Rural poverty rates in this zone are less than those in the Alpine zone, as agricultural productivity and potential is generally higher. Rural incomes and livelihoods could be improved in this zone via improvements in crop varieties and farming systems, especially apples orchards. Additionally, improved processing capabilities for raw milk from the dairy sector in this zone could reduce rural poverty rates. Increased risk of drought, flood, fire, heat waves, water scarcity and extreme events. Increased risk of agricultural pests, diseases and weeds. Increased risk of soil erosion and desertification. Increased risk of production shocks due to frosts on early flowering perennials. Crop area changes due to a decrease in optimal farming conditions. Reduced crop and livestock productivity. This zone runs from the north to south of the country primarily along the plains of the Vardar River watershed. Elevation in this zone ranges from m above sea level with the landscape ranging from floodplains to undulating hills. The soils of this zone vary greatly depending on elevation, with soils ranging from alluvial soils on the floodplain to colluvial soils in transition areas, and cinnamonic forest soils, vertisols, chernozems, renzinas and rigosol in undulating areas. Annual mean temperature for this zone is approximately 14.2ºC, with the annual mean temperature increasing moving from north to south. The mean number of summer days with (Tmax>25ºC) ranges from days. Annual precipitation for the majority of the zone ranges from 460mm - 550mm. The mean number of frost days ranges from 30 days in the southern areas to approximately 80 days in the north around Skopje. Southern regions also received a greater number of solar hours (2379 hours) compared to northern areas (2104 hours). This zone has a high potential for irrigated agriculture and more intensive production. The Mediterranean climate provides good conditions for intensive vegetable production and grape growing. This zone includes the main grape vine production area. A significant challenge for agriculture in this zone is having adequate effective rainfall for dryland crop production, especially during the summer months. With greater potential for intensive agricultural production, rural incomes in this zone are generally higher with lower rural poverty rates. However significant improvements in rural livelihoods and income could be achieved in this zone through improvements in quality control and standardization that would enable producers to supply markets with a high quality and consistent product. Increased risk of drought, flood, fire, heat waves, water scarcity and extreme events. Increased risk of agricultural pests, diseases and weeds. Increased risk of soil erosion and desertification. Crop area changes due to a decrease in optimal farming conditions. Reduced crop and livestock productivity. Source: Adapted from: Iglesias, A. et al., Adaptation to Climate Change in the Agricultural Sector, AEA Energy & Environment, Didcot; Macedonian Academy of Science: Gj. Filipovski, R.Rizovski,P.Ristevski, The characteristics of the climate-vegetation-soil zones (regions) in the Republic of Macedonia,1996.and World Bank team analysis of climate change implications; 8

9 9. The Climate Context 9.1 Climate Description Macedonia has a highly diverse climate due to its proximity to both Continental and Mediterranean air masses and the complex geography of valley s and mountains across the country. The various microclimates of Macedonia have resulted in a highly diverse agricultural sector with a large range of crops grown. The climate ranges from alpine in the west and north-west of the country to Mediterranean in the southern districts of the Vardar river valley 55. The climate is characterized by cold winters, hot summers and a highly variable precipitation regime, with a high level of variability across the country, as well as within and between seasons and across years 56. Alternating periods of long drought and high intensity rainfall are also a common feature of the climate, which combined with poor land management results in soil erosion and land degradation 57. This highly variable climate creates a challenging environment for the agricultural sector, particularly for farmers of rainfed crops. The spatial distribution of annual mean temperature and precipitation across Macedonia from are displayed in Figure 8. Annual mean temperature ranges from approximately 15 o C in central areas to high single digit temperatures in the north-west of the country 58. Precipitation generally increases moving east to west across the country, with annual precipitation ranging from about 400mm south-eastern and central districts to over 1000mm in the mountain areas that border Albania and Kosovo 59. Figure 8: Mean Annual Temperature (left) and Precipitation for Macedonia (right) from Source: To give indicative insights into the mean monthly figures for temperature and precipitation across Macedonia, the data for the capital city of Skopje is displayed in Figure 9. The winters are generally cold, with heavy snow at times, whilst the summers are hot, and prone to extended dry periods, especially late in the season 60. On a monthly basis, January is the coldest month of the year with average daily temperatures ranging from -3 o C to 5 o C, whilst average daily summer temperatures in July and August range from approximately 15 o C to 31 o C, with maximum temperatures exceeding 40 o C during extreme events 61. From an agricultural perspective, the extended dry periods in late summer, combined with high temperatures and potential hot winds can severely stress rainfed crops and pastures during critical stages in their growth cycle.

10 Figure 9: Mean Monthly Precipitation and Air Temperature for Skopje, Macedonia Source: Historical Climate Trends Analyzing climate trends from historic data is an important first step in identifying the current and potential future impacts of climate change on agriculture in Macedonia. Figure 10 displays temperature and precipitation trends for Macedonia from 1951 to 2001 d. Although there is significant inter-annual variability, the general trends indicate that on average across Macedonia, temperature has moderately increased by approximately 0.2 o C, whilst precipitation has decreased significantly by approximately 100mm e,62. However, across the country there have been some spatial differences in precipitation trends, with annual precipitation declines greater in the south-western areas of the country, whilst declines in central and northern-eastern districts have been significant, but less severe. On a seasonal basis over the same time period, spring and summer temperatures demonstrate a moderate warming trend of 0.8 o C and 0.35 o C, respectively, whilst mean temperatures for autumn and winter declined mildly 63. For precipitation, a drying trend is clearly evident for all seasons with spring, autumn and winter precipitation declining significantly (-34mm, -30mm, and -27 mm respectively), whilst summer precipitation has declined moderately (-8mm) from an already low base 64. Similar trends have been observed for temperature and precipitation by national scientists, based on analysis of two 30 year time series comparing the period to The mean air temperature from the first to the second time series based on 34 weather stations across the country indicated an increase in temperature for the vast majority of the country, with the greatest warming evident in sub-mediterranean climate in the south-east corner of the country 65. On a seasonal basis, analysis of the period indicates that mean temperatures for summer and winter increased, however in spring and autumn temperatures declined marginally 66. For precipitation, all 34 weather stations indicate that precipitation has declined in the second 30 year time series, with the greatest declines in gross terms experienced in the mountainous areas with sub-alpine and alpine climate in the west of the country 67. d The underlying data is derived from the Climate Research Unit at the University of East Anglia, with the data displayed at a course 50km pixel resolution. This is a global dataset that uses historic weather records (where available), however it should be noted that the vast majority of weather data is collected in urban areas, which may influence recorded weather data due to the urban heat island effect. e Temperature and precipitation trends are summarized on national basis, although it should be noted that there are significant differences in spatial trends across the country. 10

11 Figure 10: Temperature and Precipitation Trends Change in Spatial Mean Annual Temperature National Mean Annual Temperature Trend Change in Spatial Mean Annual Precipitation National Mean Annual Precipitation Trend Source: Historical Extreme Events Throughout its history, Macedonia and its people have been exposed to a variety of extreme climatic events that have impacted all aspects of life, especially agriculture, which is the most vulnerable of all sectors to weather events. These extreme events include drought, rain storms, hail, frost and flood. In particular, the recorded frequency and severity of both droughts and floods has increased over the past decades, which is variously explained by specialists as due to changes in climate or reporting methodologies, or as a statistical artifact of the limited time period covered by records 68,69. The most devastating impact for the agriculture sector is drought. The climate of Macedonia has always been highly variable, however an increase in drought frequency and severity exacerbates social and economic conditions in rural areas, especially in the most vulnerable areas in southern and eastern Macedonia Climate Projections The Second National Communication of Macedonia outlines future climate projections for the country. The general trends from the analysis indicate that Macedonia will become hotter and moderately drier, with significant reductions in summer 11

12 precipitation and more frequent and severe extreme events like droughts and floods 71. Analysis was performed using four general circulation models (GCM s), a combination of six different emission scenarios and four time horizons, with the results displayed in Table As demonstrated by the ensemble range for both temperature and precipitation in Table 2, there is a significant level of uncertainty between the four GCM models and associated emission scenarios when comparing actual numbers. However, from a trend perspective, all models are in agreement in projecting increased temperatures and decreased precipitation across the four time horizons. The ensemble average projects that the mean temperature for Macedonia will increase by 1.0 C and 1.9 C by 2025 and 2050, respectively 73. For the same time horizons, mean precipitation is projected to decline by 3% and 5%, respectively 74. On a seasonal basis in 2050, increased temperatures are projected for all seasons in a range from 1.5 C to 2.5 C for spring and summer, respectively 75. For the same time period, mean precipitation is projected to increase slightly in winter by 1%, decline moderately for autumn (4%) and spring (6%) and decline significantly for summer by 17% 76. Given the importance of spring and summer precipitation for crop flowering and growth, this projected decline in precipitation has significant implications for the agricultural sector. This decline in precipitation is further exacerbated by increased temperatures, with the combined impact resulting in greater moisture stress and a more marginal agricultural production environment, especially in summer 77. Table 2: Future Climate Projections for Macedonia Compared to the Period Time Horizon Temperature Projections A2 Precipitation Projections Ensemble Average Ensemble Range Ensemble Average Ensemble Range (%) C C (%) % -1% -6% % -2% -7% % -4% -12% % -5% -21% Source: Adapted from Ministry of Environment and Physical Planning, Second National Communication on Climate Change, The Republic of Macedonia, Skopje. At a sub-national scale, given the complex geography of Macedonia there will be significant difference in the magnitude of changes in temperature and precipitation on both a seasonal and annual basis. The Second National Communication outlines these annual sub-national differences via localized empirical downscaling projections for the south-east, central and north-west parts of the country, with the results presented in Table 3. The greatest warming is projected to occur in the mountainous north-west region of the country with only minimal reductions in precipitation to 2050, whilst the southeast and central regions of the country are projected to warm at a slightly slower pace, although precipitation will decline at a greater rate, especially in the second half of the century 78. The implications for agriculture become much clearer when seasonal projections are included. For example, in the south-east region, summer precipitation by 2100 is projected to decrease by 19%, whilst temperature will increase by 6 C 79. Such extreme changes in the temperature and precipitation regime will place tremendous strain on agricultural production, and highlight the importance of adaptation. Table 3: Future Sub-National Climate Projections for Macedonia Compared to the Period Time Mean Temperature Projection C Mean Precipitation Projection (%) Horizon South-East Central North-West South-East Central North-West Source: Adapted from Ministry of Environment and Physical Planning, Second National Communication on Climate Change, The Republic of Macedonia, Skopje. 9.5 Climate Change Vulnerability Index The recent World Bank report Adapting to Climate Change in Europe and Central Asia developed a series of indices to assess the exposure, sensitivity and adaptive capacity of countries to climate change in the ECA Region. The indices are based on a range of relevant parameters. For example, the exposure index was based on an extreme event dataset that combines the average additional number of 1:20 year events for hot, dry and wet years; hot, dry and wet summers; and hot, dry and wet winters projected over the period relative to the period. The vulnerability index displayed in Figure 11, is a combination of the exposure, sensitivity and adaptive capacity indices. The vulnerability of Macedonia to climate change based on this index can be classified as medium compared to other countries in the region. The main underlying drivers of vulnerability identified were the high exposure to extreme climate events, moderate 12

13 adaptive capacity and particular social and productive structures, which enhance the sensitivity of Macedonia to climate change 80. Figure 11: Climate Change Vulnerability Index, ECA Region Source: The World Bank, Adapting to Climate Change in Europe and Central Asia, Washington DC. 10. Impacts of Climate Change on Agriculture, Water Resources and Forestry 10.1 Agricultural Risks and Opportunities The downside risks for Macedonia outweigh any potential benefits that may result for the agriculture sector as a result of climate change 81. Even for particular crops and agro-ecological zones that could benefit from climate change, Macedonia is poorly positioned to take full advantage of such opportunities, unless investments and structural changes are implemented to address the country s relative inefficiency and low productivity in the agricultural sector 82. The evidence of this can be demonstrated currently by the significant yield gap between Macedonia and its neighbors (as discussed in section 4.1) and highlights the present adaptation deficit of the agricultural sector to the current climate. The climate change projections combined with the adverse agricultural implications outline the challenge for Macedonia. Although mean annual rainfall is only projected to decline moderately in the first half of the century, due to increasing temperatures, longer dry periods and the potential for drought, crop producers will be faced with greater water deficits and a more arid and risky production environment 83. Furthermore, changing climatic conditions may lead to problems associated with an array of agronomic issues, including changes in soil drainage patterns leading to salinity, damage to soil structure reducing land productivity (erosion), increased water scarcity for irrigation and exposure to new pests and diseases that challenge existing plant and animal genetics and management 84. On a positive note, across Macedonia the length of the growing period will increase, as the number of frost days is projected to reduce greatly 85. This will provide opportunities for crop distribution changes and longer-season varieties, especially for winter crops and mountainous areas. However, overall climate change is projected to have a negative impact in almost all important agricultural regions in the country and highlights the importance of developing and implementing adaptation options to increase the resilience of agricultural systems in Macedonia 86. The Second National Communication outlines the most vulnerable agricultural regions and associated crops to climate change in 2100 (See Table 4). Based on analysis by national scientists, the most vulnerable region identified was the Povardarie region in the central part of the country, where the most vulnerable crop is grape f,87. The other regions categorized as highly vulnerable occur throughout the central and eastern part of the country from north to south across the Mediterranean agro-ecological zone, whilst the less vulnerable areas occur in the mountainous western parts of the country in the Continental agro-ecological zone 88. f The most dominant crop in a vulnerable region is defined as the most vulnerable crop. 13

14 Table 4: The Most Vulnerable Agricultural Regions and Crops by 2100 Vulnerability Agro-Ecological Zone and Crop Location Most Vulnerable Mediterranean Zone: Povardarie Grape Mediterranean Zone: Strumica Tomato Mediterranean Zone Gevgelija: Tomato Highly Vulnerable southern Vardar valley Mediterranean Zone Skopje: Winter Wheat Kumanovo valley Mediterranean Zone Ovce Pole Winter Wheat Continental Zone: Pelagonija valley Alfalfa Less Vulnerable Continental Zone: Prespa/Ohrid region Apple Source: Adapted from Ministry of Environment and Physical Planning, Second National Communication on Climate Change, The Republic of Macedonia, Skopje. Changes in temperature, precipitation, and water scarcity will affect not only cropping conditions, but also the livestock sector in terms of animal health, nutrition, husbandry, and livestock-related infrastructure 89. Changing climatic conditions will adversely affect fodder and forage production and pasture biomass, which could lead to volatile feed prices, increased competition for grazing lands, and increased water scarcity 90. A recent report undertaken on behalf of the European Commission evaluated the risks and opportunities for agricultural production in nine zones across Europe. This was done within a risk management framework looking at the risks and opportunities for the agricultural sector, the magnitude of the impact, the likelihood of the impact, and the priority given for investment and action. The challenge for the Continental South zone (including Macedonia) is significant with eight downside risks, and only two upside opportunities identified (see Table 5). Four of the risks identified are classified as high priority in terms of investment and action. From this assessment, it is clear that a strong focus on the development and adoption of adaptation measures is required to ensure that agricultural systems in Macedonia remain resilient in the face of a changing climate. Table 5: Climate Change Risks and Opportunities for the Agricultural Sector in the Continental South Zone of Europe, including Macedonia Continental Detail of Risk/Opportunity Magnitude Likelihood Priority South Zone Crop area changes due to decrease in optimal farming LOW HIGH MEDIUM conditions RISK Crop productivity decrease LOW HIGH MEDIUM Increased risk of agricultural HIGH MEDIUM HIGH pests, diseases, and weeds Crop quality decrease LOW HIGH MEDIUM Increased risk of drought and water scarcity HIGH HIGH HIGH Increased irrigation HIGH HIGH HIGH requirements Soil erosion, salinization, and HIGH HIGH HIGH desertification Deterioration of conditions for livestock production MEDIUM LOW LOW Crop distribution changes leading to increase in optimal HIGH MEDIUM HIGH OPPORTUNITY farming conditions Lower energy costs for LOW HIGH MEDIUM glasshouses Source: Iglesias, A. et al., Adaptation to Climate Change in the Agricultural Sector, AEA Energy & Environment, Didcot. 14

15 10.2 Projected Crop Yield Impacts A number of studies undertaken to project the impact of climate change on crop yields have been carried out in the last few years for Macedonia. In general, there is agreement that impacts will be negative after 2025 for a variety of summer and perennial crops across the majority of the country, although projections vary significantly. However, the yield impact on winter crops like wheat are less certain with both increasing and decreasing yields projected depending on the assumptions of the underlying studies. In particular, yield projections developed by the International Institute for Applied Systems Analysis (IIASA) for rainfed wheat and maize yields for 2025 and 2050 are displayed in Figure 12. The projections clearly display the spatial variability of yield impacts across the country and the difference between crops for both time periods. For rainfed wheat, the major growing areas in the continental and mediterranean agro-ecological zones are projected to experience a moderate increase in yields of up to 10% for both 2025 and Conversely, for rainfed maize, moderate (0-10%) and severe yield declines (10-25%) are projected for the majority of Macedonia by However, by 2050 almost all of Macedonia is projected to experience severe maize yield declines of up to 25%, with some highly vulnerable areas projecting catastrophic yield declines of greater than 25%. As maize is a summer crop, these declining yield projections can also be used to some extent as a proxy indicator for other rainfed summer crops, like vegetables. 15

16 Figure 12: Projected Change for Wheat and Maize Yields for 2025 and 2050 Compared to the Period g 2025 Rainfed Wheat, % Change in Yields Compared with Present 2050 Rainfed Wheat, % Change in Yields Compared with Present 2025 Rainfed Maize, % Change in Yields Compared with Present 2050 Rainfed Maize, % Change in Yields Compared with Present Source: Fischer, G., et.al Global Agro-ecological Zone Assessment for Agriculture. IIASA, Laxenburg, Austria & FAO, Rome, Italy. g These crop yield projections are based on rainfed, high input wheat and maize, with carbon fertilization under the A2 emissions scenario. 16

17 In the Second National Communication, modeling was undertaken to assess the impact of climate change on the most vulnerable regions and associated crops in Macedonia, with the results presented in Table 6. The analysis indicates that with no adaptation and no irrigation, productivity would decline significantly for all crops in the most vulnerable areas across the country. However, it should be highlighted that many of these crops are presently irrigated and would not be profitable without irrigation; hence the assumptions of this analysis may not be realistic. Table 6: Percentage Change in Projected Rainfed Crop Yields for Vulnerable Regions and Associated Crops, Compared to the Period h Area Crop Year Kavadarci Grape -46% -50% -59% Gevgelija Tomato -75% -78% -84% Strumica Tomato -72% -75% -82% Stip Winter -14% -17% -25% Wheat Skopje Winter -8% -12% -21% Wheat Bitola Alfalfa -58% -62% -70% Resen Apple -46% -50% -59% Source: Adapted from Ministry of Environment and Physical Planning, Second National Communication on Climate Change, The Republic of Macedonia, Skopje. The adverse impact of climate change on agricultural productivity for a variety of crops highlights the need to develop agricultural systems that are resilient and highly adaptable to a future of hotter, drier and more variable conditions. As well, in areas of potential opportunity, considerable work and investment will be required to take advantage of such situations. These opportunities include an increased length of growing season leading in some areas to new crops, increased productivity and changes to cropping patterns. In either case, it is vital that a strong focus is placed on adaptation, so that adverse impacts can be minimized and advantageous opportunities pursued for the agricultural sector of Macedonia Projected Water Resources Impacts The latest local modeling for the projected impact of climate change on water resources of Macedonia was undertaken in the Second National Communication, with the results displayed in Table 7. The primary catchment of Macedonia is the Vardar river, with both the Treska and Bregalnica rivers being sub-catchments of the Vardar system. For 2050, the most significant decline in water discharge of 16.1% is projected for the Bregalnica river which drains eastern areas of Macedonia. The Treska river, which drains western areas of Macedonia will be less exposed to changes in runoff and consequently water discharge is projected to decline marginally by 3.4%. Overall the water discharge rate for the Vardar river catchment is projected to decline by 11.4% and 18.2% by 2050 and 2100, respectively. The significance of declining water availability and the importance of taking proactive water demand and supply adaptation measures is highlighted by the fact that Macedonia is already an inherently dry country with annual water resources per capita that are 70% below the European average 91. Table 7: Projected Changes in the Mean Annual Discharge of Surface Water from Major Catchments, Compared to Discharges in the year 2000 i Time Horizon Catchment Vardar Treska Bregalnica % -2.4% -10% % -3.4% -16.1% % -4.8% -19.3% % -7% -23.8% Source: Adapted from Ministry of Environment and Physical Planning, Second National Communication on Climate Change, The Republic of Macedonia, Skopje. h Changes in crop yields are based on the assumption that crops will be planted without irrigation. i Projected changes in the availability of surface water were modeled using the A2 emissions scenario 17

18 These projected climate changes will result in a significant shift in water demand and increased competition for water across all sectors of Macedonia in the coming decades, including agriculture. Presently, agriculture constitutes approximately 40% of water demand and is the number one water consumer in the country 92. However, from a historical standpoint water demand in the sector has declined significantly, as between the early 1990 s and 2004 the irrigated area declined by approximately 82% 93. This precipitous decline occurred as a result of both structural and non-structural changes that occurred post independence in As these factors are addressed and rectified it is highly likely that demand for water in the irrigated sector will increase substantially, especially given the consequences of projected climate change on non-irrigated agricultural systems. Further, this demand will increase pressure on water availability, as the most vulnerable regions to climate change are also the same locations in which the major irrigation systems of the country are based 95. Additionally, non-climatic factors like development pathways, economic growth, improvements in living standards, and changes in land use patterns, technologies and infrastructure could significantly change water demand for Macedonia in the future. These non-climatic factors could dwarf the impacts attributed to climate change alone 96. This highlights the importance of how these non-climatic factors can be influenced, positively or negatively, by policies, legislation and management at the national level Potential impacts on the Livestock Sector The Second National Communication of Macedonia outlines the direct and indirect effects of climate change on the livestock sector. In comparison to field crops, analyzing the impact of climate change on the livestock sector in a quantitative manner is still in its infancy, hence the qualitative nature of this analysis. In terms of direct effects, increased temperatures adversely impact livestock productivity, especially for modern highly productive animal breeds 98. Local breeds that are better adapted to local conditions are likely to exhibit greater resilience to the more arid and warmer climate conditions projected for the future 99. Additionally, in-direct effects of climate change on the livestock sector will result in a more challenging operating environment for producers. In-direct effects include reduced pasture and fodder production that could result in more volatile feed prices, and an increased risk of exposure to new pests and diseases, as the biological range of such threats expands into Macedonia Potential impacts on Forest Resources Projections of the climate change impacts on forest resources were presented in the Second National Communication. The main conclusions highlighted projected changes in the morphology of oak and fir trees, increased vulnerability to pests and disease, the migration of tree species towards higher altitudes, and increased frequency and severity of forest fires and the associated burnt area due to drier forest conditions and an increased proportion of dead trees in the forest structure 101. The impact of climate change on biodiversity is also projected to be significant, especially for alpine and subalpine ecological communities. With intense temperature increases and limited opportunities for vertical movement to higher altitudes due to a range of geographic obstacles, ecological preferences and available space, these communities will become increasingly rare and vulnerable and in some cases restricted to only north-facing slopes in mountainous regions Potential Adaptation Measures for the Agricultural Sector Macedonia s Second Communication, as well as other documents, propose a range of climate change adaptation options for sectors including agriculture, forestry and water resources (see Table 8) 103. A number of the adaptation options discussed are ready for implementation and are also technologies proven to increase productivity presently a win-win situation. Unfortunately, many of these options and associated action plans have not been implemented because of constraints associated with a variety of economic and social factors. Further, to effectively prioritize adaptation options and focus investment within an action planning framework, in-depth analysis of effectiveness, cost efficiency and feasibility of adaptation options is required. The importance of taking a proactive approach to adaptation in Macedonia is highlighted by the significant synergistic benefits for agriculture and rural livelihoods via such an approach. With low levels of productivity presently, a challenging climate and a high reliance on rainfed agriculture, the benefits of immediate action on adaptation are clear, especially for vulnerable rural communities. The benefits of this action are compounded further when considering the enhanced resilience these communities will achieve in the face of increased agricultural vulnerability under climate change. Moreover, some of the measures for adaptation could also be beneficial in meeting EU standards and increasing competitiveness in EU markets. The funding of such adaptation investments could be greatly enhanced through accession to the EU, via eligibility to Pillar 2 measures under the Common Agricultural Policy. 18

19 As discussed earlier, the downside risks to the agriculture sector are significant under future climate change projections, whilst upside opportunities from the projected changes pale in comparison to the costs of Macedonia s relative inefficiency and low productivity in agriculture presently 104. Hence, the focus for interested stakeholders should be on reducing the adaptation deficit by increasing the efficiency, productivity, and the adaptive capacity of agriculture to the present climate, whilst developing effective long-term adaptation options for a range of farming and livestock systems for each agroecological zone of the country. Given the inherent uncertainties of climatic developments, these adaptation options should be evaluated robustly under a range of different future climate scenarios. With limited finances, it is also important that adaptation options that give the greatest return on investment from an economic, social, and environmental perspective be prioritized and implemented to improve the resilience of agricultural systems and rural livelihoods. For this reason, adaptation options should be developed not only at the national scale, but at the agro-ecological zone scale, so that regional and local communities have adaptation options that specifically address the climate change challenges that they face. This will ensure that human and economic capital is directed towards the development and implementation of adaptation strategies that are relevant, targeted and effective. Rural communities have constantly adapted to changes in weather and seasons throughout history; however, the projections under climate change are highly likely to exceed even the most innovative farmers ability to autonomously adapt. Although there are many field-ready innovations that could rapidly improve the resilience of agricultural systems in Macedonia immediately, the lack of financial resources at the farm level is a considerable barrier to adoption. Additionally, significant investments will be required by the state and development partners to build the infrastructure, knowledge, and policy systems that will support and develop an array of adaptation options to increase the resilience of the farm sector into the future. Sector General Rainfed Cropping Irrigation Livestock Forestry Table 8: Adaptation Options for the Agriculture and Forestry Sectors of Macedonia Adaptation Option Invest in research and extension services to enhance the capacity and delivery of information to the agriculture sector, with particular reference to climate change and the implementation of adaptation options. Improve the early warning and weather information systems, including the publication and distribution of agriculture-specific weather forecasts on a frequent basis (e.g. short-term and seasonal forecasts, the monitoring of drought, etc.) Invest in the monitoring and detection of new pests and disease for the crop, livestock and forestry sectors through improvements in the sanitary and photosanitary regime. Development of new genetic varieties of crops with higher resilience to increased temperatures, lower precipitation and drought, with the potential of increased production via carbon fertilization. Increase farming system water-use efficiency and reduce soil erosion via improved surface management techniques, including the adoption of minimum and zero tillage practices. Development and adoption of improved agronomy and risk management techniques Land reclamation measures to increase soil water holding capacity via the application of manures, implementing measures that increase soil organic matter and the possible application of polymers Introduction of a weather based crop insurance program. Implementation of Vardar River watershed management Rehabilitation of existing irrigation and delivery schemes to improve access and system water-use efficiency. Modernization of on-farm distribution systems. Introduction of new irrigation techniques and improvement of existing techniques to enhance field level water use efficiency. The adoption of improved animal breeds and grass/legume seed stock with increased resilience to projected climate conditions. Improved farmhouse micro-climate management via the use of thermal insulating construction materials and modern ventilation systems to protect livestock from extreme conditions and increase productivity. Improved pasture management by matching stocking rates to pasture production and integrating pasture improvement to increase feed value. Use best practice silvicultural and forest planning measures undertake forest rehabilitation with local endemic species and other endemic varieties taking into account projected climate changes and mitigation opportunities. Development of a forest monitoring system for the assessment of climate change impacts on the most vulnerable and most economically valued forests. This includes assessing and monitoring the risks of forest fires and potential changes in the distribution and frequency of plant pests and diseases Source: Adapted from Ministry of Environment and Physical Planning, Second National Communication on Climate Change, The Republic of Macedonia, Skopje. Iglesias, A. et al., Adaptation to Climate Change in the Agricultural Sector, AEA Energy & Environment, Didcot. SIDA & GRM International, Scoping Mission on Strategizing Climate Change Adaptation and Mitigation in Macedonia Macedonian Agricultural Advisory Support Programme. 19

20 11.1 Insurance Instruments Crop insurance is an instrument that is used widely across the globe to help farmers manage production risk. It is increasingly seen as an important financial tool to assist land managers to cope with production shocks that are likely to occur at greater frequencies into the future and hence improve rural livelihoods. Crop insurance is presently not available to the vast majority of agricultural producers in Macedonia, however a possible way to expand coverage could be via the piloting of a privately run index-based weather insurance program. This approach has many potential advantages over traditional multiple-peril crop insurance, including simplification of the product, standardized claim payments to farmers in a district based on the index, avoidance of individual farmer field assessment, lower administrative costs, more timely claim payments after loss, and easier accommodation of small farmers within the program Impacts of Agriculture on Greenhouse Gas Emissions Macedonia is a signatory to the Copenhagen Accord and although a specific emission reduction target was not specified, the government has submitted to the UNFCCC a list of voluntary emission reduction measures known as Nationally Appropriate Mitigation Actions (NAMAs) 106. The NAMAs submitted by the government covered a number of sectors, including transport, energy, industry, waste, forestry and agriculture 107. Agriculture has an important role in the mitigation of greenhouse gas emissions, with many of the practices that have benefits for both productivity improvement and adaptation also having synergistic mitigation benefits (i.e. win-win-win ). Globally agriculture contributes 14% of total greenhouse gas emissions, and when combined with land use change and forestry it contributes 32.7% of total emissions, which is second to only the energy sector 108. As of 2005, the agriculture sector accounted for approximately 7% of Macedonia s greenhouse gas (GHG) emissions (below the global average), behind both the energy sector, which produced the majority of GHG for the country at 79% and the waste sector (10%) 109. GHG emissions by sector are displayed in Figure 13. The land-use change & forestry sector has generally been a net sink of GHG in Macedonia since 1990, primarily as a result of reforestation, improved forest management practices and reduced rates of illegal logging, although in years of large forest fires, like those experienced in 2000, the sector becomes a net-emitter of GHG 110. Figure 13: Percentage of Greenhouse Gas Emissions by Sector, CO 2 Equivalent, 2005 Source: 20