Purpose
– The purpose of this paper is to delve into an extensive analysis of different food crops, ranging from bananas, beans, brinjals, cabbages, chillies, creepers, groundnuts, mixed vegetables, pineapples and tomatoes, over three decades. To maintain an ever-increasing population level, much stress is exerted on the production of food crops. However, till date, very little is known about how climate change is influencing the production of food crops in Mauritius, an upper-income developing country found in the Indian Ocean and highly vulnerable to climate risks.
Design/methodology/approach
– Based on the interactions between production of crops, harvest area for crops and weather metrics, a vector autoregressive model (VAR) system is applied comprising production of each crop with their respective harvest area. Weather metrics are then entered into as exogeneous components of the model. The underlying rationale is that weather metrics are not caused by production or harvest area and should thereby be exogeneously treated. Should there be cointegration between the endogenous components, the vector error correction model (VECM) will be used. Diagnostic tests will also be entertained in terms of ensuring the endogeneity states of the presumed variables under investigation. The impact of harvest area on product is plain, as higher the harvest area, the higher is the production. However, a bi-directional causality can also manifest in the case that higher production leads towards lower harvest area in the next period as land is being made to rest to restore its nutrients to enable stable land productivity over time. Other dynamics could also be present. In case cointegration prevails, VECM will be used as the econometric model. The VAR/VECM approach is applied by virtue of the fact that traditional ordinary least squares (OLS) estimation approach will be biased and susceptible to trigger off unreliable results. Recourse is made towards the Johansen and Juselius (1990) technique. The Johansen and Juselius approach is based on the following VAR specification-bivariate VAR methodology. X1,t = A0 + A1,1X1,t – 1 + A1,2X1,t – 2+ […] .+ A1,p X1,t – p + A2,1X2,t – 1 + A2,2X2,t – 2+ […] .+ A2,pX2,t – p + ßjW + e1,t […] […]..(1) X2,t = B0 + B2,1X2,t – 1 + B2,2X2,t – 2+ […] .+ B2,p X2,t – p + B1,1X1,t – 1 + B1,2X2,t – 2+ […] .+ B1,pX2,t – p + ajW + e2,t […] […] […](2) X1,t is defined as the food crops production, while X2,t pertains to harvest area under cultivation for a given crop under consideration, both constituting the endogeneous components of the VAR. The exogeneous component is captured by W which consists of the nine aforementioned weather metrics, including the cyclone dummy. The subscript j under equation (1) and (2) captures these nine distinct weather metrics. In essence, the aim of this paper is to develop an econometric-based approach to sieve out the impacts of climate metrics on food crops production in Mauritius over three decades.
Findings
– Results show weather metrics do influence the production of crops in Mauritius, with cyclone being particularly harmful for tomatoes, chillies and creepers. Temperature is found to trail behind bearish impacts on tomatoes and cabbages production, but positive impacts in case of bananas, brinjals and pineapples productions, whereas humidity enhances production of beans, creepers and groundnuts. Evidence is found in favour of production being mainly governed by harvest area. Overall, the study points out the need of weather derivatives in view of hedging against crop damages, let alone initiation of adaptation strategies to undermine the adverse effects of climate change.
Originality/value
– To the best of the author’s knowledge, no study has been undertaken in Mauritius, let alone developing of an econometric model that properly integrates production, harvest area and weather metrics. Results show weather metrics do influence the production of crops in Mauritius, with cyclone being particularly harmful for tomatoes, chillies and creepers. Temperature is found to trail behind bearish impacts on tomatoes and cabbages production, but positive impacts in case of bananas, brinjals and pineapples productions, whereas humidity enhances production of beans, creepers and groundnuts. Evidence is found in favour of production being mainly governed by harvest area. Overall, the study points out the need of weather derivatives in view of hedging against crop damages, let alone initiation of adaptation strategies to undermine the adverse effects of climate change.
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