Abstract: Climate variability (CV) normally influences production and farm management, and climate change (CC) has precisely the effect of changing this variability. Thus, models that estimate the economic impact of CC, integrating with climatic models, agronomic, and livestock, must represent the implications of this variability on farm management. This study describes an economic model based on Discrete Stochastic Programming (DSP) which assesses the impact of CC on milk production in the Grana Padano area. The model is based on 23 farm typologies from FADN that represent 856 farms in Piacenza and Cremona, two of the most important provinces for Grana Padano production. The results of the model were projected at the regional scale. The climate scenarios, current and future, are generated with a Regional Atmospheric Modeling System. The forage production under these scenarios is estimated with the EPIC agronomic model. Estimates on milk production and livestock mortality are based on studies conducted in the Po valley. The nutritional needs of the cattle are estimated with the CNCPS model. Probability distribution functions (PDF) express the relations between the CV and the productive variables under both climate scenarios. These PDFs represent the expectations of farmers on the productive-climate variability in the DSP model, which is PMP calibrated based on land distribution observed in a reference year. Comparing the model results in the two scenarios indicates the effects of CC, given the opportunity to adapt the use of resources and techniques of cultivation. The structure of the model, and its economic results are presented and discussed, along with the strengths and weaknesses of this approach. No Label

Abstract: EU rural development policy (RDP) regulation 1305/2013 aims to protect farmers’ incomes from ongoing change of climate variability (CCV), and the increase in frequency of adverse climatic events. An income stabilization tool (IST) is provided to compensate drastic drops in income, including those caused by climatic events. The present study examines some aspect of its application focussing on Mediterranean irrigation area where frequent water shortages may generate significant income reductions in the current climate conditions, and may be further exacerbated by climate change. This enhanced loss of income in the future would occur due to a change in climate variability. This change would appreciably reduce the probability of weather conditions that are favourable for irrigation, but would not significantly increase either the probability of unfavourable weather conditions or the magnitude of their impact. As the IST and other insurance tools that protect against adversity and catastrophic events are only activated under extreme conditions, farmers may not consider them to be suitable in dealing with the new climate regime. This would leave a portion of the financial resources allocated by the RDP unused, resulting in less support for climate change adaptation.

Abstract: Climate change is likely to have a profound effect on many agricultural variables, although the extent of its influence will vary over the course of the annual farm management cycle. Consequently, the effect of different and interconnected physical, technical and economic factors must be modeled in order to estimate the effects of climate change on agricultural productivity. Such modeling commonly makes use of indicators that summarize the among environmental factors that are considered when farmers plan their activities. This study uses net evapotranspiration (ETN), estimated using EPIC, as a proxy index for the physical factors considered by farmers when managing irrigation. Recent trends suggest that the probability distribution function of ETN may continue to change in the near future due to changes in the irrigation needs of crops. Also, water availability may continue to vary due to changes in the rainfall regime. The impacts of the uncertainties related to these changes on costs are evaluated using a Discrete Stochastic Programming model representing an irrigable Mediterranean area where limited water is supplied from a reservoir. In this context, adaptation to climate change can be best supported by improvements to the collective irrigation systems, rather than by measures aimed at individual farms such as those contained within the rural development policy.