WPS4307 Policy ReseaRch WoRking PaPeR 4307 Crop Selection Adapting to Climage Change in Africa Pradeep Kurukulasuriya Robert Mendelsohn The World Bank Development Research Group Sustainable Rural and Urban Development Team August 2007 Policy ReseaRch WoRking PaPeR 4307 Abstract This paper examines whether the choice of crops is tolerant crops. Depending on whether precipitation affected by climate in Africa. Using a multinomial logit increases or decreases, farmers will also shift toward model, the paper regresses crop choice on climate, soils, drought tolerant or water loving crops, respectively. and other factors. The model is estimated using a sample There are several policy relevant conclusions to draw of more than 7,000 farmers across 11 countries in Africa. from this study. First, farmers will adapt to climate The study finds that crop choice is very climate change by switching crops. Second, global warming sensitive. For example, farmers select sorghum and maize- impact studies cannot assume crop choice is exogenous. millet in the cooler regions of Africa; maize-beans, maize- Third, this study only examines choices across current groundnut, and maize in moderately warm regions' and crops. Future farmers may well have more choices. There cowpea, cowpea-sorghum, and millet-groundnut in hot is an important role for agronomic research in developing regions. Further, farmers choose sorghum, and millet- new varieties more suited for higher temperatures. Future groundnut when conditions are dry; cowpea, cowpea- farmers may have even better adaptation alternatives with sorghum, maize-millet, and maize when medium wet; an expanded set of crop choices specifically targeted at and maize-beans and maize-groundnut when wet. As higher temperatures. temperatures warm, farmers will shift toward more heat This paper--a product of the Sustainable Rural and Urban Development Team, Development Research Group--is part of a larger effort in the group to mainstream climate change research. Policy Research Working Papers are also posted on the Web at http://econ.worldbank.org. The author may be contacted at robert.mendelsohn@yale.edu. The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent. Produced by the Research Support Team CROP SELECTION: ADAPTING TO CLIMATE CHANGE IN AFRICA1 Pradeep Kurukulasuriya and Robert Mendelsohn2 1An earlier version of this Working Paper was published as CEEPA Discussion Paper number 26. 2School of Forestry and Environmental Studies, Yale University, 230 Prospect St, New Haven, CT 06511, USA. E- mails: pradeep.kurukulasuriya@yale.edu; robert.mendelsohn@yale.edu. This paper was funded by the GEF and the World Bank. It is part of a larger study on the effect of climate change on agriculture in Africa, managed by the World Bank and coordinated by the Centre for Environmental Economics and Policy in Africa (CEEPA), University of Pretoria, South Africa. SUMMARY This paper examines whether the choice of crops is affected by climate in Africa. Using a multinomial logit model, the paper regresses crop choice on climate, soils, and other factors. The model is estimated using a sample of over 7000 farmers across 11 countries in Africa. The study finds that crop choice is very climate sensitive. For example, farmers select sorghum and maize-millet in the cooler regions of Africa, maize-beans, maize-groundnut, and maize in moderately warm regions, and cowpea, cowpea-sorghum, and millet-groundnut in hot regions. Further, farmers choose sorghum, and millet-groundnut when conditions are dry, cowpea, cowpea-sorghum, maize-millet, and maize when medium wet, and maize-beans and maize- groundnut when wet. As temperatures warm, farmers will shift towards more heat tolerant crops. Depending upon whether precipitation increases or decreases, farmers will also shift towards drought tolerant or water loving crops, respectively. There are several policy relevant conclusions to draw from this study. First, farmers will adapt to climate change by switching crops. This will inherently reduce the damages from climate change as farmers move away from crops that cannot perform well in the new climate towards crops that can. Governments and farmers should anticipate that new crops will be grown in places that experience climate change. Second, global warming impact studies cannot assume crop choice is exogenous. For example, agronomic studies or studies that use weather as a proxy for climate, implicitly assume that crop choice will not change as climate changes. Unless these studies treat crop choice as endogenous, they will seriously overestimate the damages from warming. Third, this study only examines choices across current crops. Future farmers may well have more choices. There is an important role for agronomic research in developing new varieties more suited for higher temperatures. Future farmers may have even better adaptation alternatives with an expanded set of crop choices specifically targeted at higher temperatures. 2 TABLE OF CONTENTS Section Page 1 Introduction 4 2 Theory 5 3 Data 7 4 Results 9 5 Conclusion and policy implications 12 References 14 3 1. Introduction Crop choice is frequently mentioned in the adaptation literature as a potential adaptation strategy to climate change. Farmers make crop selections based on several criteria, including available inputs such as labor (both hired and household), experience, availability of seed, prices, government policy and a host of environmental factors such as climatic and soil conditions and available surface flow. However, there are few studies that examine this question quantitatively. How important are these different factors to crop choice? What role does climate play in choosing crops? As climate changes, how will crop choice change? In this paper, we estimate the climate sensitivity of specific crop choices made by farmers in Africa. Research has shown that major grains will be extremely vulnerable to climate change in Africa (Deressa et al. 2005; Gbetibouo & Hassan 2005; Rosenzweig & Parry 1994). Adaptation strategies will be necessary to overcome the expected adverse impacts from higher temperature and changing precipitation patterns. However, quantitative assessments on how farmers will switch crops if climate changes are scarce. This research addresses this gap in the literature. The modeling follows earlier research on the impact of irrigation as an adaptation strategy for African agriculture (Kurukulasuriya & Mendelsohn 2006) and animal selection for African livestock (Seo & Mendelsohn 2006). By examining the crop choices that farmers make across different agro-ecological zones, the analysis centers on how farmers in different climate zones have adapted to current climate. The results can then be used to predict how farmers in different regions will adjust their portfolio of crops in the long run to climate change. The next section outlines the modeling framework in the paper. Crop selection is analyzed within the framework of a multinomial logit model (MNL). Section 3 outlines the available data. Section 4 presents the results of the empirical modeling on crop choice. The paper concludes in Section 5 with a discussion of the crop model results and the implications of climate change for the agriculture sector in Africa. 4 2. Theory We assume that each farmer makes his crop decisions to maximize profit. We examine choices of individual crops as well as combinations of crops in each season. For example, farmers might combine two different crops as a choice. The full set of choices is mutually exclusive: the farmer must pick one choice from the full set. The probability that a crop or crop combination is chosen depends on how profitable that choice is likely to be. We assume that farmer i's profit in choosing crop set j (j=1,2,...,J) is ij =V(Kj,Sj) +(Kj,Sj) (1) where K is a vector of exogenous characteristics of the farm and S is a vector of characteristics of farmer i. For example, K could include climate, soils, and access variables and S could include the age of the farmer and family size. The profit function is composed of two components: the observable component V and an error term, . The error term is unknown to the researcher, but may be known to the farmer. The farmer will choose the crop that gives him the highest profit. Defining Z = (K,S), the farmer will choose crop j over all other crops k if: *(Z ) > *(Zki)for k j.[or if (Zki) -(Z ) chi2 = 0.0000 Log likelihood = -7796.4556 Pseudo R2 = 0.3076 COWPEA SORGHUM MINOR MAIZE- CROPS BEANS Mean annual temperature -3.29*** -2.8*** -2.44*** -1.49*** (.36) (.25) (.27) (.41) Mean annual temperature 0.09*** 0.07*** 0.05*** 0.03*** squared (.01) (.01) (.01) (.01) Mean annual precipitation 0.06*** -0.06*** -0.05*** -0.02 (.02) (.01) (.01) (.01) Mean annual precipitation -0.0002*** 0.0002*** 0.0002*** 0.0001*** squared (0.00) (0.00) (0.00) (0.00) Mean flow (mm) 0.07** 0.02 -0.1*** -0.08** (.04) (.02) (.02) (.04) Log (Area of farmland) 0.13 0.04 -0.06 -0.12** (.07) (.05) (.04) (.05) Elevation (m) 0.001*** 0.0004*** 0.00 0.0006*** (0.00) (0.00) (0.00) (0.00) Log (Household size) 0.39** 0.67*** 0.46*** 0.46*** (.16) (.12) (.12) (.13) Dummy household with -0.88*** -1.74*** 0.15 -0.23 electricity (.22) (.19) (.14) (.16) Soil type 1 -1.96*** 2.20*** -3.91*** -2.99*** (.53) (.46) (.49) (.46) Soil type 2 -1.05*** -0.94*** -1.30*** -1.43*** (.28) (.21) (.27) (.33) Soil type 3 2.37*** -1.89*** 3.32*** 3.34*** (.49) (.48) (.38) (.38) Soil type 5 0.35 -1.30*** -0.06 -0.50 (.43) (.38) (.31) (.35) Constant 23.39*** 29.9*** 27.64*** 15.83*** (4.24) (2.76) (2.86) (4.15) 17 Table 3: (continued) COWPEA- MAIZE- MAIZE- MILLET- SORGHUM GROUNDNUT MILLET GROUNDNUT Mean annual temperature -1.19*** 0.20 -3.19*** -0.67 (.4) (.32) (.28) (.53) Mean annual temperature 0.05*** 0.00 0.08*** 0.03*** squared (.01) (.01) (.01) (.01) Mean annual precipitation 0.04*** 0.00 0.00 -0.09*** (.01) (.01) (.01) (.01) Mean annual precipitation 0.00 0.0001*** 0.00 0.0003*** squared (0.00) (0.00) (0.00) (0.00) Mean flow (mm) -0.14*** -0.12*** -0.17*** -0.36*** (.05) (.03) (.05) (.07) Log (Area of farmland) 0.28*** 0.05 0.10 0.26*** (.08) (.04) (.06) (.1) Elevation (m) 0.002*** 0.0003*** 0.0007*** -0.01*** (0.00) (0.00) (0.00) (0.00) Log (Household size) 1.11*** 0.63*** 0.91*** 0.71*** (.16) (.1) (.15) (.17) Dummy household with -1.99*** -0.76*** -1.35*** -1.01*** electricity (.25) (.13) (.22) (.24) Soil type 1 -1.13** 0.68 -0.01 1.86*** (.49) (.48) (.49) (.49) Soil type 2 -0.32 -0.5*** -1.08*** -2.30*** (.25) (.16) (.27) (.36) Soil type 3 0.56 -0.24 0.88 -0.72 (.49) (.47) (.48) (.54) Soil type 5 -1.12 -0.36 -1.14*** 4.22*** (1.03) (.2) (.43) (1.16) Constant -6.04 -4.62 28.48*** 2.12 (5.02) (3.59) (3.24) (6.53) Notes: Base category crop: MAIZE *** significant at 1% ** significant at 5% Measures of fit for previous model Log-Lik Intercept Only: -11259.634 Log-Lik Full Model: -7796.456 D(5165): 15592.911 LR(104): 6926.358 Prob > LR: 0.000 McFadden's R2: 0.308 McFadden's Adj R2: 0.298 ML (Cox-Snell) R2: 0.731 Cragg-Uhler(Nagelkerke) R2: 0.741 Count R2 : 0.464 Adj Count R2: 0.332 AIC: 2.997 AIC*n: 15816.911 BIC: -28676.888 BIC': -6034.962 BIC used by Stata: 16552.876 AIC used by Stata: 15816.911 18 Table 4: Multinomial logit crop choice model: Seasonal climate Multinomial logistic regression Number of obs = 5277 LR chi2(200) = 9453.16 Prob > chi2 = 0.0000 Log likelihood = -6533.0545 Pseudo R2 = 0.4198 COWPEA SORGHUM MINOR MAIZE- CROPS BEANS Temperature winter 0.03 2.78*** -1.05*** -0.20 (.9) (.44) (.39) (.5) Temperature winter -0.02 -0.08*** 0.03*** 0.00 squared (.02) (.01) (.01) (.01) Temperature spring -0.22 -4.76*** -0.36 -0.87 (1.19) (.51) (.51) (.65) Temperature spring 0.03 0.11*** 0.00 0.02 (.02) (.01) (.01) (.02) Temperature summer -5.63*** 1.10** -1.68*** -1.63 (1.1) (.55) (.59) (.86) Temperature summer 0.10*** -0.02 0.03** 0.02 squared (.02) (.01) (.01) (.02) Temperature fall 4.87*** -1.48** 1.68** 2.76*** (1.19) (.63) (.73) (.97) Temperature Fall -0.09*** 0.03** -0.02 -0.04 Squared (.02) (.01) (.02) (.02) Precipitation winter -0.07*** -0.09*** 0.06*** 0.01 (.02) (.02) (.01) (.01) Precipitation winter 0.0007*** 0.0005*** -0.0002** 0.00 Squared (.) (.) (.) (.) Precipitation spring 0.01 0.05*** -0.06*** 0.00 (.02) (.01) (.01) (.01) Precipitation spring 0.00 -0.0003*** 0.0001*** 0.00 (.) (.) (.) (.) Precipitation summer 0.19*** -0.05*** 0.01 0.05*** (.02) (.01) (.01) (.01) Precipitation summer -0.0007*** 0.0002*** 0.00 -0.0002*** squared (.) (-0.00004) (.) (.) Precipitation fall -0.14*** 0.03*** 0.01 -0.03*** (.02) (.01) (.01) (.01) Precipitation fall 0.0005*** -0.0001*** 0.00 0.0001*** squared (.) (.) (.) (.) 19 Table 4: (continued) COWPEA SORGHUM MINOR MAIZE- CROPS BEANS Mean flow (mm) 0.10** -0.04** -0.08*** -0.04 (.04) (.02) (.02) (.03) Log (Area of farmland) 0.08 0.10 -0.14*** -0.20*** (.08) (.06) (.05) (.05) Elevation (m) 0.0008*** 0.0006*** 0.0007*** 0.001*** (.) (0.0001) (.) (.) Log (Household size) 0.73*** 0.70*** 0.36*** 0.40*** (.19) (.13) (.13) (.14) Dummy household with -0.79*** -1.71*** 0.20 -0.21 electricity (.24) (.22) (.16) (.18) Soil type 1 0.51 2.40*** -2.62*** -0.96 (.75) (.71) (.69) (.7) Soil type 2 -1.58*** -0.46 -1.05*** -1.04*** (.37) (.26) (.32) (.38) Soil type 3 -0.90 -2.4*** 2.07*** 1.49*** (.73) (.71) (.59) (.59) Soil type 5 1.10** -0.92*** -0.66 -0.84 (.55) (.41) (.39) (.42) Constant 0.17 27.00*** 11.19*** -3.92 (7.87) (3.67) (4.11) (5.73) 20 Table 4: (continued) COWPEA- MAIZE- MAIZE- MILLET- SORGHUM GROUNDNUT MILLET GROUNDNUT Temperature winter 2.96*** 0.64 2.06*** -2.29 (1.02) (.48) (.61) (1.41) Temperature winter -0.07*** -0.04*** -0.05*** 0.05 squared (.02) (.01) (.02) (.03) Temperature spring -2.48** -1.67*** -4.18*** 2.80 (1.27) (.64) (.65) (1.95) Temperature spring 0.06** 0.05*** 0.1*** -0.03 (.03) (.01) (.02) (.04) Temperature summer -2.36** -2.2*** 0.02 4.99*** (1.05) (.68) (.65) (1.51) Temperature summer 0.05*** 0.045*** 0.01 -0.09*** squared (.02) (.01) (.01) (.03) Temperature fall 1.51 6.4*** 0.52 -4.04*** (1.04) (1.03) (.77) (1.55) Temperature fall -0.04 -0.16*** -0.02 0.08*** squared (.02) (.03) (.02) (.03) Precipitation winter -0.13*** 0.00 0.14*** 0.10** (.03) (.01) (.02) (.04) Precipitation winter 0.001*** 0.0003*** -0.0006*** -0.0005** squared (.) (0.00006) (.) (.) Precipitation spring -0.03 -0.01 -0.13*** ***29681 (.02) (.01) (.02) (.03) Precipitation spring 0.00 0.00 0.0005*** 0.00 (.) (.) (.) (.) Precipitation summer 0.15*** 0.06*** -0.03*** -0.09*** (.02) (.01) (.01) (.01) Precipitation summer -0.0005*** -0.0002*** 0.0001*** 0.0002*** squared (0.00009) (.) (.) (.) Precipitation fall -0.11*** -0.02*** 0.04*** 0.17*** (.02) (.01) (.01) (.02) Precipitation fall 0.0004*** 0.0001*** -0.0001*** -0.0006*** squared (.) (0.00003) (.) (.) 21 Table 4: (continued) COWPEA- MAIZE- MAIZE- MILLET- SORGHUM GROUNDNUT MILLET GROUNDNUT Mean flow (mm) -0.09 -0.09*** -0.30*** -0.18** (.06) (.03) (.07) (.08) Log (Area of farmland) 0.18** -0.02 0.08 0.08 (.09) (.04) (.07) (.12) Elevation (m) 0.002*** 0.0008*** 0.002*** 0.004*** (.) (.) (.) (.) Log (Household size) 1.49*** 0.76*** 0.75*** 0.58*** (.18) (.11) (.17) 0.20 Dummy household with -1.80*** -0.51*** -0.96*** -0.64** electricity (.27) (.15) (.24) (.28) Soil type 1 -0.30 0.45 -0.84 1.60** (.73) (.7) (.95) (.74) Soil type 2 -0.83*** -0.82*** -1.2*** -1.01** (.33) (.22) (.31) (.42) Soil type 3 -1.69** -1.23 0.80 -1.70** (.72) (.69) (.94) (.77) Soil type 5 0.45 -1.44*** -2.21*** -1.95 (1.1) (.24) (.48) (1.22) Constant -2.61 -34.90 14.8*** -52.87*** (7.92) (6.72) (4.79) (15.99) Notes: Base category crop: MAIZE *** significant at 1% ** significant at 5% Measures of fit for mlogit of cropcode Log-Lik Intercept Only: -11259.634 Log-Lik Full Model: -6533.054 D(5069): 13066.109 LR(200): 9453.160 Prob > LR: 0.000 McFadden's R2: 0.420 McFadden's Adj R2: 0.401 ML (Cox-Snell) R2: 0.833 Cragg-Uhler(Nagelkerke) R2: 0.845 Count R2: 0.537 Adj Count R2: 0.422 AIC: 2.555 AIC*n: 13482.109 BIC: -30380.863 BIC': -7738.937 BIC used by Stata: 14848.900 AIC used by Stata: 13482.109 22 ).pi 160 ecrP 150 140 orf(raey/ 130 120 110 m 100 m &) 90 80 p. m 70 Te 60 orf( 50 Cs 40 30 eer 20 egD 10 0 BFAS EGY ETH GHA NIG SEN SAF ZAM CAM KEN ZIM Mean Annual Climate Temperature Precipitation Note: BFAS: Burkina Faso, CAM: Cameroon, EGY: Egypt, ETH: Ethiopia, GHA: Ghana, KEN: Kenya, NG: Niger, SEN: Senegal, SAF: South Africa, ZAM: Zambia, ZIM: Zimbabwe. Figure 1: Mean annual temperature and precipitation 23 .5 .4 .3 .2 .1 0 10 15 20 25 30 35 Temperature (Celsius) other crops(556) maize and beans (399) sorghum only (569) maize and millet (331) Fig 2a: Probability of selecting low temperature crops .4 .3 .2 .1 0 10 15 20 25 30 35 Temperature (Celsius) maize (1071) maize and groundnut (811) Fig 2b: Probability of selecting medium temperature crops .8 .6 .4 .2 0 10 15 20 25 30 35 Temperature (Celsius) cowpea and sorghum (666) millet and groundnut (568) cowpea (388) Fig 2c: Probability of selecting high temperature crops 24 .2 5 .1 .1 5 .0 0 50 100 150 200 Precipitation (mm) maize (1071) cowpea and sorghum (666) maize and millet (331) millet and groundnut (568) cowpea (388) Fig 3a: Probability of selecting dry to moderate precipitation crops .4 .3 .2 .1 0 50 100 150 200 Precipitation (mm) sorghum only (569) other crops(556) maize and beans (399) maize and groundnut (811) Fig 3b: Probability of selecting high precipitation crops 25 .8 niotcelesfoyitli .6 .4 ab ob Pr .2 0 10 15 20 25 30 35 temperature cowpea (388) other crops(556) maize and beans (399) Fig 4a: Probability of selecting low temperature crops (i) with maize .6 niotcelesfoytili .4 ab .2 ob Pr 0 10 15 20 25 30 35 temperature maize (1071) sorghum only (569) cowpea and sorghum (666) maize and groundnut (811) maize and millet (331) (ii) without maize 3 .0 noi ect 2 .0 selfoyitil ab 1 obrP .0 0 10 15 20 25 30 35 temperature sorghum only (569) cowpea and sorghum (666) maize and groundnut (811) maize and millet (331) Fig 4b: Probability of selecting medium temperature crops 26 1 .8 noicte .6 selfoyitil ab .4 Prob .2 0 10 15 20 25 30 35 temperature Note: Crop depicted above is millet-groundnut. 4c: Probability of selecting high temperature crops .5 .4 .3 .2 .1 0 50 100 150 200 precipitation maize (1071) maize and millet sorghum only (569) millet and groundnut (568) other crops(556) maize and beans maize and groundnut (811) Fig 5a: Probability of selecting low to medium precipitation crops 1 .8 .6 .4 .2 0 50 100 150 200 precipitation cowpea cowpea and sorghum (666) Fig 5b: Probability of selecting high precipitation crops 27