Assessing the Economic Value of El Niño-Based Seasonal Climate Forecasts for Smallholder Farmers in Zimbabwe

Author(s):  
Ephias M. Makaudze
Author(s):  
Cynthia Rosenzweig ◽  
Daniel Hillel

Knowledge of climate impacts is necessarily embedded in multifaceted, multiscaled contexts. The many facets include physical, ecological, and biological factors—as well as social, political, and economic ones—interacting on a spectrum of scales ranging from the individual to the household, the community, the region, the nation, and the world. Such complexities encompass natural as well as cultural aspects. Therefore, assessing the role of climate requires a comprehensive, integrated approach. Various methods and models have been proposed or developed to aid understanding of the relationships between agriculture and climate variability (and more specifically, ENSO) in regions around the world. Relevant methods include socioeconomic research techniques such as interviews and surveys; statistical analyses of climate and agronomic data; spatial analysis of remote-sensing observations; climate-scenario development with global and regional climate models and weather generators; and cropmodel simulations. Here we describe conceptual models that guide regional analysis, a framework of methods for regional studies, and examples of research in several agricultural regions that experience varying degrees of ENSO effects. Conceptual models are important because they can guide research and application projects and help physical, biological, and social scientists work together effectively within a common context. Equally important is the role of conceptual models in promoting effective interactions between researchers and agricultural practitioners. An early conceptual model for enhancing the usefulness of seasonal climate forecasts has been called the “end-to-end” approach (figure 5.1a). This model consists of a linear unidirectional trajectory in which El Niño events precipitate climate phenomena that, in turn, induce agronomic responses, with ensuing economic consequences. In disciplinary terms, the end-to-end trajectory begins with the physical sciences, proceeds to agronomy, and then to social science—primarily economics. The end-to-end model quickly evolved into an “end-to-multiple-ends” approach (figure 5.1b) because social science consists of many disciplines besides economics. Outcomes and insights regarding the use of seasonal climate forecasts differ, depending on whether the disciplines of economics, anthropology, political science, or sociology are involved. However, a weakness of these conceptual models is the absence of agricultural practitioners (e.g., farmers, planners, input providers, and insurers) in the research process.


2020 ◽  
Vol 12 (1) ◽  
pp. 3-14 ◽  
Author(s):  
D. H. Cobon ◽  
R. Darbyshire ◽  
J. Crean ◽  
S. Kodur ◽  
M. Simpson ◽  
...  

AbstractSeasonal climate forecasts (SCFs) provide opportunities for pastoralists to align production decisions to climatic conditions, as SCFs offer economic value by increasing certainty about future climatic states at decision-making time. Insufficient evidence about the economic value of SCFs was identified as a major factor limiting adoption of SCFs in Australia and abroad. This study examines the value of SCFs to beef production system management in northern Australia by adopting a theoretical probabilistic climate forecast system. Stocking rate decisions in October, before the onset of the wet season, were identified by industry as a key climate sensitive decision. The analysis considered SCF value across economic drivers (steer price in October) and environmental drivers (October pasture availability). A range in forecast value was found ($0–$14 per head) dependent on pasture availability, beef price, and SCF skill. Skillful forecasts of future climate conditions offered little value with medium or high pasture availability, as in these circumstances pastures were rarely overutilized. In contrast, low pasture availability provided conditions for alternative optimal stocking rates and for SCFs to be valuable. Optimal stocking rates under low pasture availability varied the most with climate state (i.e., wet or dry), indicating that producers have more to gain from a skillful SCF at these times. Although the level of pasture availability in October was the major determinant of stocking rate decisions, beef price settings were also found to be important. This analysis provides insights into the potential value of SCFs to extensive beef enterprises and can be used by pastoralists to evaluate the cost benefit of using a SCF in annual management.


2019 ◽  
Vol 41 (3) ◽  
pp. 165
Author(s):  
Duc-Anh An-Vo ◽  
Kate Reardon-Smith ◽  
Shahbaz Mushtaq ◽  
David Cobon ◽  
Shreevatsa Kodur ◽  
...  

Seasonal climate forecasts (SCFs) have the potential to improve productivity and profitability in agricultural industries, but are often underutilised due to insufficient evidence of the economic value of forecasts and uncertainty about their reliability. In this study we developed a bio-economic model of forecast use, explicitly incorporating forecast uncertainty. Using agricultural systems (ag-systems) production simulation software calibrated with case study information, we simulated pasture growth, herd dynamics and annual economic returns under different climatic conditions. We then employed a regret and value function approach to quantify the potential economic value of using SCFs (at both current and improved accuracy levels) in decision making for a grazing enterprise in north-eastern Queensland, Australia – a region subject to significant seasonal and intra-decadal climate variability. Applying an expected utility economic modelling approach, we show that skilled SCF systems can contribute considerable value to farm level decision making. At the current SCF skill of 62% (derived by correlating the El Niño Southern Oscillation (ENSO) signal and historical climate data) at Charters Towers, an average annual forecast value of AU$4420 (4.25%) was realised for the case study average annual net profit of AU$104000, while a perfect (no regret) forecast system could result in an increased return of AU$13475 per annum (13% of the case study average annual net profit). Continued improvements in the skill and reliability of SCFs is likely to both increase the value of SCFs to agriculture and drive wider uptake of climate forecasts in on-farm decision making. We also anticipate that an integrated framework, such as that developed in this study, may provide a pathway for better communication with end users to support improved understanding and use of forecasts in agricultural decision making and enhanced sustainability of agricultural enterprises.


Author(s):  
Nasiru Ibrahim ◽  
Kingsley Teye Mensah ◽  
Hamdiyah Alhassan ◽  
William Adzawla ◽  
Christina Adjei-Mensah

Aim: Agricultural production is directly affected by climate change. This means that access to climate information would help the farmers’ preparedness for farming activities and the decision on the types of crops to grow, when to grow them and the types of farm management activities to adopt. As such, this study analysed farmers’ preference for seasonal climate forecasts and their willingness-to-pay for these information. Place and Duration: The study was conducted in the Savelugu Municipality in the Northern region of Ghana. A single period data was collected for analysis. Methodology: A total of 300 farmers were selected through a two stage sampling procedure and used for the study. From the theory of contingent valuation, a descriptive statistic and Heckman model were used in analysing the data. Results: From the results, the majority of farmers were willing-to-pay for seasonal climate information, especially, climate forecasts on rainfall. The farmers preferred that these seasonal climate forecasts should be disseminated to them through the radio. The farmers exhibit positive willingness-to-pay for seasonal climate forecasts to about 20 Ghana cedis. A number of factors influenced the farmers’ decision and amount they were willing-to-pay and these include gender, age, perception of climate change experience, ownership of radio, off-farm activity and participation in planting for food and jobs (PFFJ) program. Conclusions: The findings of this study highlighted the need for climate information by farmers and how this can be effectively disseminated to them. Generally, government institutions and other private agencies should take up the challenge and opportunity to provide climate information, especially seasonal rainfall forecast, to the farmers at a fee.  This fee must be determined at an optimal or at least a breakeven price considering the farmer’s ability to pay. The study also recommended that climate information dissemination should be integrated into government’s PFFJ program.


2008 ◽  
Vol 47 (5) ◽  
pp. 1269-1286 ◽  
Author(s):  
Francisco J. Meza ◽  
James W. Hansen ◽  
Daniel Osgood

Abstract Advanced information in the form of seasonal climate forecasts has the potential to improve farmers’ decision making, leading to increases in farm profits. Interdisciplinary initiatives seeking to understand and exploit the potential benefits of seasonal forecasts for agriculture have produced a number of quantitative ex-ante assessments of the economic value of seasonal climate forecasts. The realism, robustness, and credibility of such assessments become increasingly important as efforts shift from basic research toward applied research and implementation. This paper surveys published evidence about the economic value of seasonal climate forecasts for agriculture, characterizing the agricultural systems, approaches followed, and scales of analysis. The climate forecast valuation literature has contributed insights into the influence of forecast characteristics, risk attitudes, insurance, policy, and the scale of adoption on the value of forecasts. Key innovations in the more recent literature include explicit treatment of the uncertainty of forecast value estimates, incorporation of elicited management responses into bioeconomic modeling, and treatment of environmental impacts, in addition to financial outcomes of forecast response. It is argued that the picture of the value of seasonal forecasts for agriculture is still incomplete and often biased, in part because of significant gaps in published valuation research. Key gaps include sampling of a narrow range of farming systems and locations, incorporation of an overly restricted set of potential management responses, failure to consider forecast responses that could lead to “regime shifts,” and failure to incorporate state-of-the-art developments in seasonal forecasting. This paper concludes with six recommendations to enhance the realism, robustness, and credibility of ex-ante valuation of seasonal climate forecasts.


Author(s):  
Cynthia Rosenzweig ◽  
Daniel Hillel

Regional studies and activities related to the El Niño–Southern Oscillation (ENSO) and other oscillations, seasonal climate prediction, and agricultural impacts are in progress around the world (figure 7.1). Here we describe some regional impacts and programs in place that are entraining climate information into decision making. Elements of these activities include the definition of the agricultural or other targeted systems; exploration of the social, political, and cultural contexts; examination of the temporal and spatial patterns of physical and biological impacts related to ENSO; analysis of economic effects; development and testing of seasonal climate forecasts and their delivery; investigation of crop management and other adaptations leading to implementation of dynamic risk-management strategies; and the development and evaluation of programs. In northern Peru, El Niño events bring torrential rains and floods that damage crops by eroding slopes, silting valleys, and oversaturating soils. The precipitation regime of Chile is likely to be intensified as well when El Niño events occur (Meza et al., 2003). Downscaled seasonal climate forecasts and crop growth models have been used to evaluate the impact of ENSO and management responses on crops in the Andean highlands of Peru (Baigorria, 2007); and Meza (2007) combined stochastic modeling of meteorological variables, a simple soil crop algorithm, and a mathematical programming model to assess the value of ENSO information for irrigation in the Maipo River Basin, Chile. Central America, being a narrow strip of land tightly squeezed between the Atlantic and Pacific oceans, is particularly influenced by major global climate variability systems, especially the El Nino–Southern Oscillation and the Arctic Oscillation (AO; M. Campos and P. Ramirez, personal communication, 2007; Rosenzweig et al., 2007). El Niño events are associated with dry summers on the Pacific coast and wet summers on the Caribbean coast, while the opposite pattern is associated with La Niña. A decrease in winter rainfall on the Caribbean coast since the late 1970s has been linked to changes in the Arctic Oscillation. Events with important economic and social consequences affected Central America in 1926, 1945–56, 1956–57, 1965, 1972–73, 1982–83, 1992–94, and 1997–98 (Ramirez, 2005).


Sign in / Sign up

Export Citation Format

Share Document