Abstract: Climate change threatens agricultural productivity worldwide, resulting in higher food prices. Associated economic gains and losses differ not only by region but also between producers and consumers and are affected by market dynamics. On the basis of an impact modeling chain, starting with 19 different climate projections that drive plant biophysical process simulations and ending with agro-economic decisions, this analysis focuses on distributional effects of high-end climate change impacts across geographic regions and across economic agents. By estimating the changes in surpluses of consumers and producers, we find that climate change can have detrimental impacts on global agricultural welfare, especially after 2050, because losses in consumer surplus generally outweigh gains in producer surplus. Damage in agriculture may reach the annual loss of 0.3% of future total gross domestic product at the end of the century globally, assuming further opening of trade in agricultural products, which typically leads to interregional production shifts to higher latitudes. Those estimated global losses could increase substantially if international trade is more restricted. If beneficial effects of atmospheric carbon dioxide fertilization can be realized in agricultural production, much of the damage could be avoided. Although trade policy reforms toward further liberalization help alleviate climate change impacts, additional compensation mechanisms for associated environmental and development concerns have to be considered.

Abstract: The current paper investigates the medium term economic impact of climate changes on the EU agriculture. The yield change data under climate change scenarios are taken from the BIOMA (Biophysical Models Application) simulation environment. We employ CAPRI modelling framework to identify the EU aggregate economic effects as well as regional impacts. We take into account supply and market price adjustments of the EU agricultural sector as well as technical adaptation of crops to climate change. Overall results indicate an increase in yields and production level in the EU agricultural sector due to the climate change. In general, there are relatively small effects at the EU aggregate. For example, the value of land use and welfare change by approximately between -2% and 0.2%. However, there is a stronger impact at regional level with some stronger effects prevailing particularly in the Central and Northern EU and smaller impacts are observed in Southern Europe. Regional impacts of climate change vary by a factor higher up to 10 relative to the aggregate EU impacts. The price adjustments reduce the response of agricultural sector to climate change in particular with respect to production and income changes. The technical adaption of crops to climate change may result in a change production and land use by a factor between 1.4 and 6 relative to no-adaptation situation.

Abstract: The diversity in farmers’ objectives and responses to external drivers is usually not considered in integrated assessment studies that investigate impacts and adaptation to climate and socio-economic change. Here, we present an approach to assess how farmers’ stated objectives relate to their currently implemented practices and to preferred adaptation options, and we discuss what this implies for assessments of future changes. We based our approach on a combination of multi-criteria decision-making methods. We consistently assessed the importance of farmers’ objectives and adaptation preferences from what farmers say (based on interviews), from what farmers actually do (by analysing current farm performance) and from what farmers want (through a selected alternative farm plan). Our study was performed for six arable farms in Flevoland, a province in the Netherlands. Based on interviews with farmers, we reduced the long list of possible objectives to the most important ones. The objectives we assessed included maximization of economic result and soil organic matter, and minimization of gross margin variance, working hours and nitrogen balance. In our sample, farmers’ stated preferences in objectives were often not fully reflected in realized farming practices. Adaptation preferences of farmers largely resembled their current performance, but generally involved a trend towards stated preferences. Our results suggest that in Flevoland, although farmers do have more objectives, in practical decision-making they focus on economic result maximization, while for strategic decision-making they account for objectives influencing long-term performance and indicators associated with sustainability, in this case soil organic matter.