IMPACT OF ADAPTATION STRATEGIES ON FARM HOUSEHOLDS FARM INCOME: AN ANALYSIS BASED ON BIO ECONOMIC MODEL

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1 Université Cheikh Anta Diop West African Science Service Center on Climate Change and Adapted Land Use IMPACT OF ADAPTATION STRATEGIES ON FARM HOUSEHOLDS FARM INCOME: AN ANALYSIS BASED ON BIO ECONOMIC MODEL By Mikemina, Pilo 1 Taladidia Thiombiano Tobias Wünscher - 1 WASCAL Ph.D Student

2 Outline Introduction Objectives of the study Methodology Results Conclusion

3 Introduction (1/3) Agricultural production remains the main source of livelihoods for most rural communities in developing countries In sub-saharan Africa (SSA): Agriculture involves 60 percent of the population Contributes about 30 percent of Gross Domestic Product (GDP) In Togo: 65% of the population is engaged in agriculture Agriculture contributes to the GDP at the level of on average 38% during the ten last years

4 Introduction (2/3) Climate change is a reality (IPCC, 2007) and its projected impact on agriculture is alarming Yield reduction in some African countries could be as much as 50% by 2020 (Boko et al, 2007) Net crop revenues could fall by 90% by 2100 (Boko et al. 2007) Given these discouraging prospects, it is no surprise that the identification of both climate-proofing technologies and adaptation strategies are vital to support crops yields. However, lack of appropriate human adaptation could increase vulnerability to climate shocks.

5 Introduction (3/3) Indeed, it has been shown (Burton et al., 1993) losses due to climate shocks cannot be ascribed to these events alone, but are in some cases being increased by maladaptation Consequently, this study aims to investigate how farm households decision to adapt, in response to long run changes in key climatic variables such as temperature and rainfall, affects farm income in the Savanna region of Togo This seems particularly relevant because most of the debate on climate change in agriculture has been focusing on the impact of climate change rather than on the role of adaptation

6 Study site: The Savanna region of Togo Why the Savanna region? The Savanna region is the poorest region of the country Its agriculture is typical of the constraints on agriculture in the country. Located in the driest part of the country, climatic risk is very high in agricultural activity.

7 Data Source: The survey Timeframe: March to May 2013 Stratified random sampling was the sampling technique 9 Communities,18 villages and 450 households Survey modules include: Socioeconomic HH characteristics Crop and livestock production Access to extension, markets, credit, and collective action Climate change perception and shocks Adaptation responses and constraints Household assets, and basic services After cleaning it remained 444 households

8 Methodology: Bio-economic model Cluster households in homogenous farm groups Dynamic recrsive mathematical programming model (built base on Agricultural Household Model theory) The objective function is the maximzation of the discounted farm income from cropping and livestock Constraints Land constraint Credit constraint Labour constraint Fertilizer constraint Consumption constraint Accounting for risk behavior through Telser s Approach Climate is incorporated through the probabilities of occurrence of the states of nature relative to rainfall

9 Descriptive statistics

10 Results: Bio-economic model calibration The 444 households in the data set were grouped into 6 clusters among which 1 was single cluster and 1 pair cluster. The single cluster and the cluster with two entities were discarded as we concluded that they are too different from the rest of the sample. The remaining clusters seem to be realistic, and furthermore conform to the real situation according to the information from our field work. Finally, four clusters with the size of 90, 8, 40 and 303 were retained The cluster 2 has the highest level of assets value, farm equipment, own fund and operated land per household. So we refer to the cluster 2 as wealthier farmers group.

11 Results: Bio-economic model calibration By contrast, the cluster 4 has the lowest level of asset value, farm equipment, own fund and operated land. We refer to this cluster as poor farmers group Consequently, simulation analysis considered only these two clusters for the simple reason that they represent extreme cases in our data set

12 Results: Bio-economic model calibration Poor farmers group Rich farmers group

13 Adaption scenarios In one case we assume adaptation choice is fixed and in other case, we allow farmers to endogenously increase adaptations intensity By comparing the two we were able to demonstrate the effect of adaptation on farm income For irrigation: Increase of irrigated area by 25% Soil and water conservation technique enter the model in terms of 25% increase of water conservation area. For farm size: we increase bush land and compound land by 25%. For reduction in fertilization: we reduce the applied fertilizer by 25%.

14 Results The results indicate, as a result of CC, a decline of average farm income compared to the baseline of US$705 (52%) for poor farmers group and US$766 (46%) for wealthier farmers group. Adaptation impact in percentage change of farm income

15 Results:Farm size, irrigated land and soil conservation area For that end, we increase farm size (compound land and bush land) by 15% and analysed the effect on irrigated land and soil conservation area Effect of farm size on irrigated land and soil and water conservation The effect of farm size on adaptation is inconclusive

16 Results:Farm size, irrigated land and soil conservation area The effect of farm size on adaptation is inconclusive Two reasons could explain these results in our study Firstly, the negative effect of farm size on irrigated area could be due to the fact that farmers in the study area practice irrigation agriculture only in the case the farm income obtained during the rainy growing season is below a certain level judged insufficient for the household to meet obligations of high priority this is more likely to happen for households with relatively small farm size Secondly, the probable reason of the inconclusive effect of farm size on adaptations could be because adaptation is plot specific. This means that it is not the size of the farm, but the specific characteristics of the farm that dictate the need for a specific method of adapting to climate change.

17 Conclusion There is possibility to reduce climate change impact on farm income by the use of private adaptation strategies ---- irrigation, soil and water conservation techniques and increase in farm size. However, reduction in the use of fertilizer appears to increase farm households vulnerability to climate Thus, prior to any adaptation strategy promotion policy, the identification of yield-enhancing adaptation measures among the available strategies is therefore a crucial step Irrigation is the best strategy. It has a win-win outcome. It helps in coping the adverse effects and risk of climate change while increasing agricultural productivities in farm households

18 THANK YOU FOR YOUR ATTENTION!!