The Economic Impact of Climate Change on Agricultural Crops Yield in Khuzestan (Case study: Wheat, Barley, and Rice)

Abstract

Agriculture is one of the most important economic activities that is related more than anything else to atmospheric conditions. Accordingly, in this study, we examine the effects of changes in temperature and rainfall on yields of wheat, rice and barley in Khuzestan province based on panel data including time series from 1993 to 2013 and cross-sectional data (5 cities in Khuzestan province that have the highest area under cultivation and yield for selected crops). The results indicated that temperature and rainfall have negative effects on wheat yield. Also, these variables positively affect rice, while in the case of barley they have negative effect on yield. On the other hand, changes in climate conditions lead to a decline in the yield of wheat, rice and barley by 0.42%, 0.3%, and 0.61%, respectively. In addition, changes in climate condition in the period 1993-2013 have led to decline in economic profit by 285.52 thousands Rials for wheat, rice and barley in 2013. Based on the results of research, it is recommended that short-run and long-run weather forecasts should be taken into consideration to prepare and adopt the necessary measures to protect agricultural crops and prevent damage caused by adverse atmospheric and climatic factors in all stages of planting and harvesting. Also, creating a comprehensive insurance system for agricultural products to stabilize income from product yield can boost it.