Abstract: Climate change scenarios suggest that long periods without rainfall will occur in the future often causing instability of the agricultural products market. The aim of our research was to build a model describing the amount of precipitation and droughts for forecasting crop yields in the future. In this study, we analysed a non-standard mixture of gamma and one point distributions as the model of rainfall. On the basis of the rainfall data, one can estimate parameters of the distribution. Parameter estimators were constructed using a method of maximum likelihood. The obtained rainfall data allow confirming the hypothesis of the adequacy of the proposed rainfall models. Long series of droughts allow one to determine the probabilities of adverse phenomena in agriculture. Based on the model, yields of barley in the years 2030 and 2050 were forecasted which can be used for the assessment of other crops productivity. The results obtained with this approach can be used to predict decreases in agricultural production caused by prospective rainfall shortages. This will enable decision makers to shape effective agricultural policies in order to learn how to balance the food supplies and demands through an appropriate management of stored raw food materials and import/export policies.

Abstract: Highlights • A framework to study climate and policy uncertainty in agriculture is presented. • Combining both sources of uncertainty has ambiguous effects on agriculture. • Uncertainty needs to be highlighted in modelling tools for policy analysis. Abstract Farmers are exposed to climate change and uncertainty about how that change will develop. As farm incomes, in Norway and elsewhere, greatly depend on government subsidies, the risk of a policy change constitutes an additional uncertainty source. Hence, climate and policy uncertainty could substantially impact agricultural production and farm income. However, these sources of uncertainty have, so far, rarely been combined in food production analyses. The aim of this study was to determine the effects of a combination of policy and climate uncertainty on agricultural production, land use, and social welfare in Norway. Output yield distributions of spring wheat and timothy, a major forage grass, from simulations with the weather-driven crop models, CSM-CERES-Wheat and, LINGRA, were processed in the a stochastic version Jordmod, a price-endogenous spatial economic sector model of the Norwegian agriculture. To account for potential effects of climate uncertainty within a given future greenhouse gas emission scenario on farm profitability, effects on conditions that represented the projected climate for 2050 under the emission scenario A1B from the 4th assessment report of the Intergovernmental Panel on Climate Change and four Global Climate Models (GCM) was investigated. The uncertainty about the level of payment rates at the time farmers make their management decisions was handled by varying the distribution of payment rates applied in the Jordmod model. These changes were based on the change in the overall level of agricultural support in the past. Three uncertainty scenarios were developed and tested: one with climate change uncertainty, another with payment rate uncertainty, and a third where both types of uncertainty were combined. The three scenarios were compared with results from a deterministic scenario where crop yields and payment rates were constant. Climate change resulted in on average 9% lower cereal production, unchanged grass production and more volatile crop yield as well as 4% higher farm incomes on average compared to the deterministic scenario. The scenario with a combination of climate change and policy uncertainty increased the mean farm income more than a scenario with only one source of uncertainty. On the other hand, land use and farm labour were negatively affected under these conditions compared to the deterministic case. Highlighting the potential influence of climate change and policy uncertainty on the performance of the farm sector our results underline the potential error in neglecting either of these two uncertainties in studies of agricultural production, land use and welfare.

Abstract: The European Union (EU) has recently reformed its Common Agricultural Policy (CAP) and, in parallel, has completely abolished the production quotas for milk. These changes will have important consequences for the use of land, of inputs (i.e., water and chemicals) and on the economic performance of rural areas. It is of interest to evaluate the integrated impact of these modifications and of climate change (CC), since the latter could neutralize or reverse some desired effects of the former. For this purpose, this paper evaluates the potential impact of the abolition of milk quotas, as well as of the reform of the first pillar of CAP in two different climate scenarios (present and near future). A bio-economic model simulates the possible adaptation of various farm types in an agricultural area of Southern Italy to these changes, given the available technological options and current market conditions. The main results show that the considered policy changes have small positive impacts on economic and environmental factors of the study area. However, some farm types are more affected. CC can effectively attenuate or reverse several of those effects, especially in some farm types. These results can inform the planning of future changes to the CAP, which will have to act in the context of deeper climate alteration.