Abstract: Climate-induced uncertainty in crop yields is introduced in the Norwegian sector model Jordmod. The model is comprised of a supply module in which profits for more than 300 regional farms are maximized and a market module which maximizes social welfare in the agricultural sector. In the supply module, farmers determine their plant decisions and crop input levels (N-fertilizer) subject to a discrete number of weather outcomes affecting crop yields. After that, a specific weather distribution is chosen determining crop yields. The resulting input-output mix at farm level makes up the supply side of the commodity markets which together with linear demand functions determine equilibrium levels. The procedure is repeated for each discrete weather outcome. Note that plant decisions and crop input levels remain the same for all weather outcomes as farmers face the same uncertainty during all repetitions, but crop yield will vary. Hence, equilibrium prices and quantities will vary as well allowing their representation as stochastic distributions. In a preliminary empirical application, the stochastic results are contrasted with the deterministic results based on the mean values of the weather outcomes. This comparison will shed light on the potential error made by neglecting uncertainty at the farm level.

Abstract: • This study combines crop, livestock and economic models.
• Models interaction is through use of relevant input and output variables.
• Future climate change will result in increased grass and wheat dry matter yields.
• Changes in grass, wheat and milk yields in future reduce farm emissions intensity.
• Changes in future dry matter yields and emissions lead to increased profitability.
There is a scientific consensus that the future climate change will affect grass and crop dry matter (DM) yields. Such yield changes may entail alterations to farm management practices to fulfill the feed requirements and reduce the farm greenhouse gas (GHG) emissions from dairy farms. While a large number of studies have focused on the impacts of projected climate change on a single farm output (e.g. GHG emissions or economic performance), several attempts have been made to combine bio-economic systems models with GHG accounting frameworks. In this study, we aimed to determine the physical impacts of future climate scenarios on grass and wheat DM yields, and demonstrate the effects such changes in future feed supply may have on farm GHG emissions and decision-making processes. For this purpose, we combined four models: BASGRA and CSM-CERES-Wheat models for simulating forage grass DM and wheat DM grain yields respectively; HolosNor for estimating the farm GHG emissions; and JORDMOD for calculating the impacts of changes in the climate and management on land use and farm economics. Four locations, with varying climate and soil conditions were included in the study: south-east Norway, south-west Norway, central Norway and northern Norway. Simulations were carried out for baseline (1961–1990) and future (2046–2065) climate conditions (projections based on two global climate models and the Special Report on Emissions Scenarios (SRES) A1B GHG emission scenario), and for production conditions with and without a milk quota. The GHG emissions intensities (kilogram carbon dioxide equivalent: kgCO2e emissions per kg fat and protein corrected milk: FPCM) varied between 0.8 kg and 1.23 kg CO2e (kg FPCM)− 1, with the lowest and highest emissions found in central Norway and south-east Norway, respectively. Emission intensities were generally lower under future compared to baseline conditions due mainly to higher future milk yields and to some extent to higher crop yields. The median seasonal above-ground timothy grass yield varied between 11,000 kg and 16,000 kg DM ha− 1 and was higher in all projected future climate conditions than in the baseline. The spring wheat grain DM yields simulated for the same weather conditions within each climate projection varied between 2200 kg and 6800 kg DM ha− 1. Similarly, the farm profitability as expressed by total national land rents varied between 1900 million Norwegian krone (NOK) for median yields under baseline climate conditions up to 3900 million NOK for median yield under future projected climate conditions.

Abstract: The paper addresses future climate and policy uncertainty for agricultural production and food security in Norway. The two crop simulation models, CSM-CERES-Wheat and, the LINGRA model, were used to determine the impact of climate change on grain yield of spring wheat, and harvest security and biomass yield of timothy, an important forage grass in Northern Europe, respectively. Harvestable yield distributions from the crop models were fed into a stochastic version of the economic sector model Jordmod. Distributions of the rates of agricultural subsidies rates were assessed based on past policy changes and prospective reforms. The model was used to assess the effects of both climate and policy uncertainty on agricultural production, land use, and national food security. Jordmod is comprised of a supply module in which stochastic profits for more than 300 regional farms are maximized and a deterministic market module which maximizes social welfare in the agricultural sector. Socio-economic scenarios were developed around the level of ambition of Norwegian agricultural policy makers. The model results were contrasted with the deterministic results based on average yield and payment rates. The innovation of this paper lays in assessing the combined effects of future climate and policy uncertainty for the agricultural sector in Norway. It also highlights the potential errors made by neglecting these types of uncertainty in economic modelling. No Label