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Adaptation and Climate Change Impacts: A Selection Model of Irrigation and Farm Income in Africa

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Journal of African Economies JAE-2009-013 Article

climate change, agriculture, irrigation, household, adaptation, cross-sectional

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Adaptation and Climate Change Impacts: A Selection Model of Irrigation and Farm Income in Africa

Abstract Although there is now an extensive literature on the economic impacts of climate change, there are surprisingly few studies that have examined adaptation. This paper examines whether irrigation can be an effective adaptation strategy against climate change in Africa. The paper develops a selection model of irrigation choice and conditional income. Using data from farmers across eleven African countries, the paper demonstrates that the choice of irrigation is sensitive to both temperature and precipitation. Rainfed and irrigated farm income both respond to climate but not in a similar fashion. We demonstrate that it is important to anticipate that irrigation will change in some climate scenarios. Even with the endogenous irrigation model, however, African agriculture is very sensitive to climate change scenarios. The results suggest that irrigation is an important adaptation strategy in climate scenarios if there is sufficient water.

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1. Introduction Many researchers have now developed methods to measure the economic impacts of climate change on especially agriculture. Agroeconomic models have made predictions of climate impacts in the United States based on the results of crop simulation models (Adams et al 1999). The Ricardian model estimates the relationship between farmland values and climate (Mendelsohn et al. 1994) and has been applied to measure climate sensitivity in the United States (Mendelsohn et al. 1994; Mendelsohn and Dinar 2003), Sri Lanka (Seo et al. 2005; Kurukulasuriya and Ajwad 2007), Israel (Fleischer et al. 2008), Africa (Kurukulasuriya et al 2006), and Latin America (Seo and Mendelsohn 2008). A consistent criticism that has been leveled against Ricardian studies, however, concerns whether or not the studies properly take into account irrigation (Cline 1996; Darwin 1999; Schlenker et al. 2005). One suggested correction is to estimate a separate response function for rainfed farms alone (Schlenker at al. 2005) or to estimate separate Ricardian regressions for rainfed and irrigated farms (Kurukulasuriya and Mendelsohn 2007; Seo and Mendelsohn 2008). A final approach to measuring climate change impacts on farms is to use panel data and examine how farm net revenues fluctuate with weather using fixed effects to control for cross sectional variation

(Greenstone and Deschenes 2006).

The agroeconomic models have an advantage by building from the ground up so that they contain enormous farm detail. However, it is difficult in practice to observe and capture the adaptations that farmers are actually making to climate. The current models do a good job of capturing crop switching but they have no good way of capturing changes farmers are making to raise specific crops. The traditional Ricardian approach does do a good job of capturing long run adaptation, but it treats adaptation as a black box. It is not at all clear what changes farmers have made to adapt to climate using this model. The Schlenker et al. model identifies irrigation as being important but it treats the choice to irrigate as though it is exogenous even though it is sensitive to climate. The panel fixed effects model does not include adaptation at all and treats climate change as a continual surprise.

In this paper, we try to explicitly model irrigation in order to begin to understand what specific adaptations will help farmers adapt to climate change. We build on the extensive irrigation literature that recognizes irrigation is a choice (see Caswel and Zilberman 1986;

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Dinar and Yaron 1990; Negri and Brooks 1990; Dinar and Zilberman 1991; Dinar, Campbell, and Zilberman 1992) but, in this paper, we develop the role that climate plays. We build an endogenous irrigation model that recognizes the potential of sample selection bias (Heckman 1979). In the first stage, we estimate the probability of irrigation including climate, district flows, and other exogenous variables. In the second stage, we estimate the conditional income from rainfed and irrigated farming including a sample selection correction term.

We test this model using a sample of over 10,000 plots across 11 African countries. Studying the impacts of climate change on Africa is very important. There is a growing body of evidence that low latitude countries and especially Africa will bear the brunt of climate change damages (Pearce et al. 1996; Mendelsohn and Williams 2004; Mendelsohn, Dinar, and Williams 2006; Tol 2002; Kurukulasuriya et al, 2006). Low latitude countries are more vulnerable than mid to high latitude countries because they are hotter, have a larger fraction of their economy in agriculture, and have less wealth and technology for adaptation.

The empirical results reveal that the choice of irrigation is endogenous. As long as there is a sufficient flow of water, irrigation is an important adaptation strategy to climate.

estimation of the net revenue functions, however, does not reveal any evidence of sample selection bias. The coefficient on the inverse Mills ratio is not significant and there are no significant changes in any remaining coefficients.

Section 2 develops a formal theoretical model. Section 3 presents the data used in this study and the empirical cross-sectional results. Section 4 displays the cross sectional results of the empirical modeling. Section 5 utilizes the empirical model to simulate how irrigation and expected net revenues might be affected by both a mild and a severe climate scenario. The predictions of the endogenous irrigation model are compared with predictions from models that assume irrigation is exogenous. With the mild wet scenario, the exogenous predictions are biased because they fail to account for the large increase in irrigation. With the more severe and dry scenarios, however, there is very little change in irrigation and so the bias is small. The paper concludes by summarizing the results and discussing some policy

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implications.

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2. Model The underlying theoretical structure of this model assumes that each farm maximizes profits:
max = PiQ* ( X , E ) WX

(1)

where is profit, Pi is output prices, Q* is output, X are chosen inputs, E is environmental factors such as climate and soils, and W is the price of inputs. In this paper, we assume that the amount of cropland is fixed, in order to focus on the issue of irrigation.1 Profit is defined broadly to include not only sold goods but also goods consumed by the household.

We develop a sample selection model (Heckman 1979). However, there is an important difference between this case and the labor selection model. In the labor example, people who did not work had no observed income. In this model, farmers who choose not to irrigate, still have observed income from rainfed farming.

We assume that a farmer irrigates if irrigation is more profitable than rainfed farming. Clearly the cost of irrigation lies largely in expensive capital. The farmer must weigh whether the present value of the additional annual returns from irrigation is worth the cost. The higher the additional net revenue each year, the more attractive irrigation becomes. In the first stage, we estimate a dichotomous choice model of irrigation, Y, where Y=1 is irrigation (1) and Y=0 is rainfed farming:
Yi = 1 X + 1

We identify the choice equation with altitude, district surface water flow, and a dummy for access to capital. It is easier to irrigate at high altitudes probably because there is more potential slope to the land allowing farmers to direct water at low cost. Once one controls for climate, altitude has little effect on conditional net revenues. Higher water flows also make it easier to irrigate. Water flows are not expected to affect conditional earnings because

farmers with access to water generally use as much as they want (quantities are not restricted). We introduce a dummy variable for countries with well developed capital

markets (Egypt and South Africa). Note that this dummy variable could just have easily

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(2)

Land uses themselves are influenced by climate and other variables (Mendelsohn et al. 1996). However, this topic is beyond the scope of this paper.

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measured good governance. In the second stage, we estimate a conditional profit function for each type of farming based on the available exogenous variables, Z:
i = 1Z 1 + 2 if Y = 1 D = D Z D + 3 if Y = 0

(3) (4)

where Y1 is a latent variable explaining the choice of irrigation, I is the net profit of farms that have chosen irrigation, and D is the net profit of farms that have chosen rainfed farming, X is a k-vector of regressors, ZI is an m-vector of regressors for irrigation, ZD is an n-vector of regressors for rainfed, and the error terms 1 and 2 and 1 and 3 are jointly normally distributed, independently of X and Z, with zero expectations.

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1 ~ N(0,1) 2 ~ N(0,2) 3 ~ N(0, 3)


corr( 1 , 2 ) = 2 corr( 1 , 3 ) = 3

Irrigation is observed only if it is more profitable than rainfed farming. Thus, the observed

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dependent variable Y is: Y=1 if I > D Y=0 if D > I

When 2 = 0, an Ordinary Least Squares (OLS) regression could provide unbiased estimates of the coefficients for the conditional irrigation equation, but when 0 the OLS estimates are biased. A parallel result holds for 3 and the rainfed regression coefficients.

consequently employ the inverse Mills ratio from the selection model in both the irrigated and rainfed conditional regressions in order to control for selection (Heckman 1979). We expect the signs on the coefficient of the inverse Mills ratio to be the opposite in each regression.

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The availability of water is often not just a farmers decision. In the United States, there are examples of extensive canal systems that bring water long distances to farmers. The choice to irrigate, in this case, is a combination of what the farmer chooses and what the irrigation district provides. In Africa, such extensive canal systems are not so common. Irrigation is often just the choice of a farmer. However, even when the choice involves both a farmer and irrigation district, the question is still the same. Is it worthwhile to irrigate given the cost? The decision, even if it is a joint one, will still be sensitive to cost benefit criteria. Even if the decision is a joint one, it is sensitive to climate. In this paper, we use the water flows in a political district to identify the availability of water. This is an exogenous measure of natural flows, not an endogenous choice.

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The sample across the 11 countries is has

3. Data

The empirical analysis is based on a household survey of farms conducted in 11 countries across Africa: Burkina Faso, Cameroon, Egypt, Ethiopia, Kenya, Ghana, Niger, Senegal, South Africa, Zambia and Zimbabwe.2 The sample was chosen to select farms across a wide range of climates within each country.

approximately the same mean characteristics as farms in the continent have.

As many African countries do not have formal land markets, collecting land values is difficult. Instead, we rely on measurements of net revenue per hectare. Net revenues are appropriate measurements of the annual net productivity of the land. However, compared to land values, net revenues are a more volatile measure since they reflect factors that change year by year. Net revenue is defined as gross revenue minus the cost of transport, packaging and marketing, storage, post-harvest losses, hired labor (valued at the median market wage rate), light farm tools (such as files, axes, machetes, etc.), rental on heavy machinery (tractors, ploughs, threshers and others), fertilizer and pesticide. Median district prices from the survey were used in estimating the values of both input and crop prices. Household labor costs are not included as a cost in net revenues because it was not clear what value to assign to wages. We controlled for household labor by using household size as a proxy.

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We are deeply grateful to the country teams from each of these countries for designing, collecting, and cleaning this data and making this project a success. For more information about the entire study, see Dinar et al 2006.

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In each country, districts were chosen in order to sample farms across a wide range of agroclimatic conditions in each country. In each chosen district, a random but clustered sample of farms was selected. After data cleaning, removing farms that did not grow crops, and surveys with field errors and missing information, the final number of useable surveys was 8463. We conducted the analysis at the plot level of each farm as the dataset was sufficiently detailed to extract and utilize information about whether or not a particular plot (from a set of three) was irrigated or not. There are 10,915 plots in the data set. Each farm provided plot specific data on whether or not irrigation was used, crop production (including crop type, amount harvested, quantity sold, quantity consumed and amount of sales receipt) and crop costs (fertilizer, pesticide and seed data). Using this data, prices per crop and yields per hectare of farmland and cropland were estimated, as well as plot specific crop revenues and farm level gross and net revenues. The estimated prices and yields were validated based on official records of district and national level prices and yields per hectare. Net revenue estimates are at the farm level because the input data, including labor (both hired and household) and machinery, were available only at that unit of measurement. It was not possible to allocate most inputs to specific plots as much of it was applied to several plots at a time. The dataset we used contains 1750 irrigated plots and 9183 rainfed plots. The distribution of surveys irrigated and rainfed plots by country is shown in Table 1. The farm plots reflect a representative sample of African agro-ecological zones.

Because the analysis collects net revenue data for only one year but we are interested in the impact of climate, the survey inquired whether the weather was average or atypical in the year of the survey. The large majority of the farmers reported the weather was typical. Because the size of the weather aberrations is small in this particular survey, it is not expected that they will bias the results. The fact that there is only one year of revenue data for each site, however, does make this data unsuitable for studying climate variance.

This study relies on climate normals (mean long term weather) of both precipitation and temperature for each district. The monthly temperature data comes from US Department of Defense satellite measurements between 1988 and 2003 (Basist et al. 2001). This set of polar orbiting satellites takes measurements at every location on earth at 6am and 6pm every day.

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The satellites are equipped with sensors that measure surface temperature by detecting microwaves that pass through clouds (Weng & Grody 1998). The monthly precipitation data comes from the Africa Rainfall and Temperature Evaluation System (ARTES) (World Bank 2003). This dataset, created by the National Oceanic and Atmospheric Associations Climate Prediction Center, is interpolated from ground station measurements of precipitation over the period 19482001. This combination of using temperature measurements from satellites and precipitation data from ground stations provides the best available climate measures for agricultural analysis (Mendelsohn et al 2006). The average temperatures and precipitation for each country in the sample are shown in Appendix A. Note that there is a wide range of climates across the 11 countries in the sample.

It is not possible to use every month of climate in a Ricardian regression because of the high correlation between one month and the next. Consequently, we clustered the monthly data into three month seasons. We explored several alternatives but finally selected November, December, and January as winter, February through April as spring, May through July as summer, and August through October as fall. These seasonal definitions provide the best

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fit with the data.

We adjusted for the fact that seasons in the southern and northern

hemispheres occur at exactly the opposite months of the year. Note that although Egyptian and South African climates resemble mid latitude seasonal climates, that the distribution of temperatures in countries near the equator is quite different with very warm springs and summers. Rainfall depended on monsoons which tended to come in fall and winter.

Soil data from FAO (2003) is included in this analysis. The FAO data provides information about the major soil, soil texture, and slope in each location. Data concerning the hydrology is based on the predicted output from a hydrological model for Africa developed for this study (IWMI & University of Colorado 2003). The model calculated the water flow through each district in the surveyed countries in each season. Data on elevation at the centroid of each district is from the United States Geological Survey (USGS, 2004). The USGS data derives from a global digital elevation model with a horizontal grid spacing of 30 arc seconds (approximately one kilometer).

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During pre-testing of the survey instrument3, it was clear that some farmers cultivated at least two plots of land. Subsequently, the survey data collected crop data, including production quantities, amount sold, and sale receipts from crops for the largest single plot of cultivated land (referred to hereafter as the main plot) and all others (referred to as the secondary plot). The following analysis is based on this plot data.

We tested whether clustering affected the significance of the reported results. Clustering is not expected to bias the coefficients but it is expected to reduce the significance of the coefficients. We find that a comparison of the marginal climate effects when clustering is controlled with the analysis presented in this paper suggests that the results remain significant and robust4. The predictive ability of the model is not compromised by clustering.

4. Empirical results

Table 2 presents the first stage of the analysis, a probit model of whether a plot is irrigated or not. There are 10915 plots with complete information for the regression. The explanatory variables in the first stage include seasonal climate variables, farm characteristics, soils, and seasonal water flow. Both linear and quadratic climate and flow variables are introduced in the probit to capture nonlinearities in climate responses. The quadratic temperature,

precipitation, and flow variables are significant. The reported standard errors in the paper are based on the Huber-White estimator of variance which is robust against many types of

misspecification of the model (Heltberg & Tarp 2002).

The seasonal district surface water flow variables and altitude identify choice.

coefficients on most of these variables are significant. Higher altitudes imply rougher terrain that makes trapping water easier. Higher water flows make irrigation a more attractive (possible) alternative for each season except winter. Note that this is not the water available to a specific farmer but rather the exogenous water flow in a district.

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The

3 4

Available upon request from the authors. The results of the marginal analysis with clustering can be obtained from the authors.

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In the selection model, we also control for soils and other farm characteristics. The soil variables reflect the proportion of a district with a particular soil type. Soils can increase or decrease the probability of irrigation depending on whether they are hilly or undulating (positive) or steep (negative). Often, fine soils are negatively associated with irrigation and medium is positively associated. The effects of types of soils vary depending on slope and soil texture. Electricity is positively associated with irrigation. This may reflect the role of electricity in pumping or just access to markets. Plot size is not related to irrigation choice. Larger households are more likely to irrigate which suggests that irrigation is labor intensive on a per hectare basis. Other household variables such as education, age, and experience were not significant.

The climate and flow coefficients are highly significant.

functional form, they are hard to interpret. Using the coefficients in Table 2, we present the mean marginal impact of temperature, precipitation, and flow in Table 4. The probability of adopting irrigation increases with higher temperatures in each season except in spring. The annual effect of higher temperatures reduces the probability of adopting irrigation. Irrigation allows crops to withstand higher temperatures and the combination of irrigation and higher temperatures allows for multiple seasons. The probability of adopting irrigation falls with more precipitation in every season except summer. With more rain, farmers can grow crops without irrigation, making the cost of irrigation unnecessary. The probability of adopting irrigation falls if there is a uniform annual increase in flow across all seasons. However, this is because flow during the winter season is very harmful, probably causing damage to irrigated systems. Flow during the spring and fall seasons substantially increase the probability of irrigation. In general, farmers favor irrigation in warmer and drier African climates with good flow in the spring and fall.

The second stage model of net revenue conditional on irrigation choice in shown in Table 3. The dependent variable is annual net income per hectare and the independent variables include climate, soils, and other control variables. Columns (b) and (d) are estimated with OLS. We present two sets of regressions.

(Heckman 1979), we include the inverse Mills ratio in columns (a) and (c) to control for selfselection bias in the second stage OLS model. In both cases, there is one regression for

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However, with the quadratic

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rainfed plots and one for irrigated plots. The coefficient on the estimated Mills ratio is not significant but it has the negative sign expected in the rainfed regression. Comparing the regression coefficients in the OLS and corrected models reveals that they are not significantly different. There is little evidence of selection bias.

Farm size is significant and negative for both irrigated and rainfed plots. Larger plots have lower net revenue per hectare. This may partially be due to our omission of household labor as a cost in net revenue (a measurement bias). Household labor per hectare will tend to be greater in smaller plots. The result may also be due to higher management intensity on smaller plots (a real effect). We also include a dummy variable that denotes whether or not a farm has electricity. Electrified farms outperform farms that do not have electricity in both the irrigated and rainfed models. Electrification might directly enhance productivity and earnings or it may simply be a proxy for farms that are closer to markets or more modern. Farms with larger households have higher net revenue in both samples but the coefficient is significant in only the irrigated sample.

The second stage regressions also give important insights into the climate sensitivity of farms. The results show that rainfed and irrigated farms are both sensitive to climate but

have different climate responses.

marginal impact is presented in Table 4. Annual warmer temperatures have no effect on irrigated farm income as seasonal effects are offsetting. Annual precipitation does not have a significant effect in irrigated farm income either, though wetter summers are beneficial and wetter falls are harmful. Warmer annual temperatures reduce the income from rainfed plots with harmful effects from warmer springs and falls but offsetting beneficial effects from warmer winters and summers. Although these seasonal results are quite different from temperate climate findings (Mendelsohn et al 1994; Mendelsohn and Dinar 2003), one must remember that spring is often the hottest season in Africa. More annual precipitation

increases rainfed plot income. Precipitation is especially beneficial in the spring and harmful only in the winter. The standard deviations in Table 4 were calculated using bootstrapping.

Although the analysis above makes a strong attempt to adjust for some unwanted variation by introducing available control measures, there are many variables affecting farm income that

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In order to interpret the climate coefficients, the mean

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cannot be measured. In particular, there may be a number of variables that vary at the national level including agricultural policy, taxes, credit availability, trade, and technology. In the next analysis, we control for these effects by using country fixed effects. Of course, using country fixed effects is not a perfect solution as it removes a lot of desired variation in climate as well. However, by comparing the fixed effects results with the uncontrolled results, the reader can get a sense of the potential importance of national scale effects. Egypt and South Africa are omitted in the fixed effect model.

The country fixed effect results of both the probit and the conditional income regressions are presented in Table 5. The functional form and independent variables are identical to the earlier regression except that country dummy variables have been added to both regressions. The temperature coefficients remain significant but several of the precipitation and flow coefficients are less significant with the country fixed effects. With the fixed effects model, the identifying variables in the probit equation are generally less significant than in Table 2. The remaining coefficients are generally quite similar. Examining the country coefficients, we find that farmers in Cameroon and Kenya are more likely to irrigate, controlling for the

rest of the independent variables.

The country fixed effect conditional income equations are also presented in Table 5. The fixed effect precipitation and temperature coefficients for the irrigated regression are similar to those in Table 3. However, the climate coefficients for the fixed effect rainfed regression are quite different. Household, farm control, and soil variables are very similar in Tables 3 and 5. Controlling for other factors, irrigated farmers in all the included countries earn less than Egyptian and South African irrigated farmers. This is because of the high level of capital and technology applied to irrigated farms in those two countries. Rainfed farmers in most of the remaining countries earn less than rainfed farmers in South Africa (there are no rainfed farms in Egypt), but the difference is significant only in Kenya and Zambia. Rainfed farmers in Cameroon earn the most income of every country, controlling for other variables. The coefficients of the inverse Mills ratios are insignificant in Table 5 suggesting again that there is not a serious sample selection bias problem.

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Table 6 presents the climate marginals for the fixed effect model. Most of the results are similar to Table 4. Higher temperatures continue to encourage farmers to adopt irrigation. The annual temperature and precipitation continue to have an insignificant effect on conditional income in the irrigated equation and annual precipitation continues to be positive and significant in the rainfed equation. Higher annual flow continues to reduce the

probability of irrigation but again this is because of a large negative impact from winter flow. However, some of the results have changed. With fixed effects, annual precipitation no longer has a significant effect on the choice of irrigation and annual temperature no longer has a significant impact on the income from rainfed plots. It is difficult to determine whether the choice of irrigation is a country effect (e.g. Egypt) or an annual precipitation effect. The impact of annual temperature on rainfed income may also be caused by country level variables. For example, most of the countries with temperate climates also have more productive and modern agriculture (Egypt, South Africa, and highland Kenya).

5. Climate change simulation

In this section, we calculate the welfare effect of a changing climate. In the previous analyses, the comparisons were cross sectional in nature, reflecting the performance of one farm in one climate against another farm in a different climate. In the analysis in this section, we use these empirical cross sectional results to project impacts over time. It must be understood that this exercise is trying to measure long term impacts and adaptations as farmers fully adapt to a new climate. The projections are not intended to trace dynamic

adjustments from year to year.

We examine how alternative future climate scenarios may affect the choice of irrigation and net revenue per hectare. We rely on three climate models to provide a range of plausible predictions: the Parallel Climate Model (PCM) (Washington et al. 2001), the Center for Climate System Research (CCSR) model (Emori et al. 1999) and the Canadian Climate Centre model (CCC) (Boer et al. 2000). We look at predicted climate changes in each African country in 21005. On average, PCM predicts a relatively small increase in

temperature (2.3C), CCSR is between (4.5C), and the CCC model predicts a very large
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The choice of 2100 as a scenario is for exposition purposes. The analysis can easily project impacts for other scenarios. 13

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increase (6.5C) in temperature for Africa.

The PCM predicts a slight increase in

precipitation, especially in winter, whereas the CCC and CCSR predict slight reductions in precipitation.

For all the comparisons, we assume that African agriculture remains otherwise unchanged. That is, we examine the impact of a future climate change scenario on current farms. In practice, farms will change over time. They are likely to have more variable inputs, more capital, new technology, and better access to markets. All of these changes would likely have a large influence on future outcomes. In their absence, it is important to recognize that the predictions in this paper are not good forecasts of future outcomes. The predictions are intended simply to provide a sense of the role that climate might play.

Nonmarginal changes in climate may induce other changes, for example, in prices. Exactly how prices will change is hard to predict because prices will likely depend on global production and demand. Although it is likely that African crop production will be reduced by warming, it is not at all clear that global production will be affected (Gitay et al. 2001). If market access in 100 years is good, the local price will be equal to the global price and there may be no price effects. If prices increase (decrease), farmers will gain (lose) and consumers will lose (gain). In this paper, we assume that there will be no price effects so we might overestimate the impacts to African farmers.

Using the probit coefficients for irrigation, we first examine what happens to the probability of selecting irrigation in the two scenarios. In the PCM scenario, the seasonal temperature effects are largely offsetting. However, the large increase in winter precipitation encourages many farms to switch to irrigation. Ignoring the effects on flow, the probability of irrigation in the sample rises dramatically to 56% (see Table 7). However, the big increase in winter flow actually has a negative effect on irrigation. When the change in flow is taken into account, the increase in irrigation in the PCM scenario is smaller (44%). Note that new water storage facilities which could hold back winter flows and make them available in the spring and summer might convert harmful winter flows into beneficial spring and summer flows. We do not take different water management techniques into account in this analysis but they

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are potentially very promising. With the CCC and CCSR scenario, the seasonal temperature, precipitation, and flow effects are offsetting and the probability of irrigation falls slightly.

Multiplying through the probability of selecting irrigation times the conditional income from irrigation and the probability of selecting rainfed agriculture times the conditional income of rainfed farming yields an expected income for each farm. The welfare effect per hectare is the average impact across the sample. Repeating this process in each climate scenario provides an estimate of the expected income in each scenario. The change in expected income is an estimate of the annual welfare effects of each scenario.

We compare three estimates of welfare effects for each climate scenario in Table 7. The first column presents the welfare effects assuming that rainfed and irrigated farms stay as they are now. That is, the probability of irrigation does not change and there is no sample selection bias. The second model again assumes that the probability of irrigation does not change but it uses the corrected regression for sample selection bias.

probability of irrigation to adjust and it uses the corrected regression estimates. Standard deviations were computed using bootstrapping (350 repetitions).

The first two measures of welfare are virtually identical. There is no evidence of sample selection bias in the data. However, the exogenous estimates grossly underestimate the benefits of the PCM scenario because they do not take into account the large increase in irrigation permitted by PCM. The PCM scenario predicts a huge increase in irrigation along with the wetter and mildly warmer climate. The exogenous models consequently predict that PCM would lead to only a small benefit of 9% whereas the endogenous model predicts a benefit of 35%. Adjusting for the harmful effect of winter flows, the endogenous model still predicts that the PCM scenario would lead to a welfare benefit of 24%.

Comparing the welfare results with the two dry climate scenarios, reveals that they are all quite similar. There is not a large change in irrigation, so the exogenous welfare estimates are quite similar to the endogenous estimates. It is interesting to note that although the PCM scenario actually predicts gains for African farmers, the other two climate scenarios predict

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large losses. Without additional water, irrigation will not help farmers escape the very high temperatures of these scenarios.

6. Conclusions This paper provides a modeling framework to explicitly capture irrigation in the Ricardian model. We control for the endogeneity of irrigation by building a two stage selection model. Our results indicate that there is little evidence of sample selection bias between African rainfed and irrigated farms. However, it is important to treat irrigation as though it is endogenous because the choice is sensitive to at least some climate scenarios. In particular, with a dry continent that relies on rainfed agriculture, irrigation can increase substantially with a wetter climate. Similarly, it is important to model irrigation in places that currently rely on irrigation but which might become dry in the future. Impact studies will be biased if they fail to take into account the substantial changes in irrigation that climate change might cause. In Africa, models that did not account for the endogeneity of irrigation seriously underestimated the benefits of the PCM wetter scenario. However, with the dry CCSR and CCC scenarios, irrigation did not change very much. All the models predicted similar

damages from these climate scenarios.

The analysis reveals that rainfed and irrigated plots in Africa do not have similar responses to temperature. Net revenues from rainfed plots tend to fall with higher temperatures whereas net revenues on irrigated plots are less affected. However, both rainfed and irrigated plots appear to have similar positive responses to higher precipitation levels except in places with high rainfall. These results suggest one must be careful not to extrapolate from results on

just rainfed plots or results using just rainfed crops to agriculture as a whole.

The results indicate that current African agriculture is sensitive to climate change. A mild increase in temperature with an increase in precipitation may be beneficial to African farmers, but a severe increase in temperature without any increase in precipitation will be very harmful. Warming and reductions in precipitation will be especially deleterious to rainfed farmers, generally the poorest segment of the agriculture community. In contrast, many of the current farms in temperate places or who practice irrigation may actually benefit from climate change. 16

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The projected impacts of future climate scenarios for African agriculture in this paper are merely suggestive. The paper assumes that African farms remain as they are now. In practice, future farms are likely to be quite different from what is there today. These changes may have a large impact on climate sensitivity. Further research exploring how farms in Africa might evolve and how this might affect future climate sensitivity is needed.

Finally, the paper hints that water management is likely to be an important issue for Africa. The results suggest that flows of rivers in the winter are actually harmful to farms, probably because they are associated with flooding. If these flows could be delayed into spring and summer, the model suggests they would turn from being harmful into being beneficial. Systems of dams that would store water for a season or two could both reduce the harms of floods and increase the value of irrigation water. This is an immediate benefit that could be enjoyed today. However, in a future warmer world, water will be even more scarce and such adaptations even more important.

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REFERENCES Basist, A., C. Williams, N. Grody, T. Ross, S. Shen, A. Chang, R. Ferraro, and M. Menne. 2001. Using the Special Sensor Microwave Imager to monitor surface wetness. Journal of Hydrometeorology 2: 297308.

Boer, G., G. Flato, and D. Ramsden. 2000. A transient climate change simulation with greenhouse gas and aerosol forcing: projected climate for the 21st century, Climate Dynamics 16, 427-450.

Caswell, M. and D. Zilberman. 1986. The Effect of Well Depth and Land Quality On the Choice of Irrigation Technology. American J. of Agricultural Economics 68: 798-11.

Cline, W. 1996. The impact of global warming on agriculture: Comment. American Economic Review 86: 13091312.

Darwin, R. 1999. The impacts of global warming on agriculture: A Ricardian analysis: Comment. American Economic Review 89: 10491052.

Dinar, A. and D. Yaron. 1990. Influence of Quality and Scarcity of Inputs on the Adoption of Modern Irrigation Technologies. Western J. of Agricultural Economics 15(2): 224-33.

Dinar, A. and D. Zilberman. 1991. The Economics of Resource-Conservation, PollutionReduction Technology Selection, The Case of Irrigation Water. Resources and Energy 13: 323-48.

Dinar, A., M. B. Campbell, and D. Zilberman. 1992. Adoption of Improved Irrigation and Drainage Reduction Technologies Under Limiting Environmental Conditions. Environmental & Resource Economics 2: 373-98.

Emori, S. T. Nozawa, A. Abe-Ouchi, A. Namaguti, and M. Kimoto, (1999). Coupled oceanatmospheric model experiments of future climate change with an explicit representation of sulfate aerosol scattering. Journal of Meteorological Society, 77, 12991307, Japan.

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FAO (Food And Agriculture Organization). 1997. Irrigation Potential in Africa: A basin approach. FAO Land and Water Bulletin, 4, FAO Land and Water Development Division, Rome.

FAO (Food And Agriculture Organization). 2003. The Digital Soil Map of the World: Version 3.6 (January), Rome, Italy.

Gitay, H., S. Brown, W. Easterling, B. Jallow. 2001. in McCarthy, J., O. Canziani, N. Leary, D. Dokken, and K. White (eds.) Climate Change 2001: Impacts, Adaptation, and Vulnerability, Intergovernmental Panel on Climate Change Cambridge University Press: Cambridge, pp 235-342.

Heckman, J. 1979. Sample selection bias as a specification error. Econometrica 47: 153 161.

Heltberg, R and F. Tarp. 2002. Agricultural supply response and poverty in Mozambique.

Food Policy 27: 103124.

IMWI (International Water Management Institute) and The University of Colorado. 2003. Hydroclimatic Data. GEF/CEEPA/World Bank Project on Climate, water and agriculture: Impacts and adaptation of agro-ecological systems in Africa.

Kurukulasuriya, P., R. Mendelsohn, R. Hassan, J. Benhin, M. Diop, H. M. Eid, K.Y. Fosu, G. Gbetibouo, S. Jain, , A. Mahamadou, S. El-Marsafawy, S. Ouda, M. Ouedraogo, I. Sne, N. Seo, D. Maddison and A. Dinar, 2006. Will African Agriculture Survive Climate Change? World Bank Economic Review 20: 367-388 .

Kurukulasuriya, P.,and M. I. Ajwad. 2007. Application of the Ricardian Technique to Estimate the Impact of Climate Change on Smallholder Farming in Sri Lanka Climatic Change 81: 39-59.

Mendelsohn R., W. Nordhaus, and D. Shaw. 1994. The impact of global warming on agriculture: A Ricardian analysis. American Economic Review 84: 753771. 19

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Mendelsohn, R. and A. Dinar, 2003. Climate, water, and agriculture. Land Economics 79: 328341.

Mendelsohn, R. and L. Williams. 2004. Comparing Forecasts of the Global Impacts of Climate Change Mitigation and Adaptation Strategies for Global Change 9: 315-333.

Mendelsohn, R., A. Dinar, and L. Williams. 2006. The Distributional Impact of Climate Change On Rich and Poor Countries Environment and Development Economics 11: 1-20.

Mendelsohn, R., A. Basist, A. Dinar, F. Kogan, P. Kurukulasuriya, and C. Williams. 2006. Climate Analysis with Satellites Versus Weather Station Data Climatic Change 81: 71-83.

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Negri, D. H., and D. H. Brooks. 1990. Determinants of Irrigation Technology Choice. Western Journal of Agricultural Economics 15: 213-23.

Nordhaus, W. 2006. Geography and Macroeconomics: New Data and New Findings Proceedings of the National Academy Sciences 103: 3510-3517.

Schlenker, W., M. Hanemann, and A. Fischer. 2005. Will US Agriculture really benefit from global warming? Accounting for irrigation in the hedonic approach. Economic Review, 95(1): 395406.

Sen, A. 1962. An aspect of Indian agriculture, Economics Weekly, Annual Number, 243-66.

Seo, S. N., R. Mendelsohn, and M. Munasinghe. 2005. Climate Change Impacts on Agriculture in Sri Lanka Environment and Development Economics 10: 581-596.

Seo, N. and R. Mendelsohn. 2008. A Ricardian Analysis of the Impact of Climate Change on South American Farms Agricultura Technica (forthcoming).

USGS (United States Geological Survey). 2004. Global 30 Arc Second Elevation Data, USGS National Mapping Division, EROS Data Centre. 20

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Washington, W., J. Weatherly, G. Meehl, A.Semtner, B. Bettge, A Craig, W. Strand, J. Arblaster, V. Wayland, R. James, and Y. Zhang. 2000. Parallel Climate Model (PCM): Control and Transient Scenarios. Climate Dynamics, 16: 755-774.

Weng F. and Grody N. 1998. Physical retrieval of land surface temperature using the Special Sensor Microwave Imager. Journal of Geophysical Research 103: 88398848. World Bank. 2003. Washington, DC. Africa Rainfall and Temperature Evaluation System, World Bank,

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Tables and Figures

Table 1: Sample of farms

Country Burkina Faso Cameroon Egypt Ethiopia Ghana Kenya Niger Senegal South Africa Zambia Zimbabwe Total

No. of plots 1141 1013 1030 932

Irrigated plots 59 145 1030 67 49 95 52 34 83 13

Rainfed plots 1082 868 0 865 1161 767 1081 1328 200 996 835 9183

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Table 2: Probit model of whether to irrigate


Variable Coefficients Variable Coefficients

Temp - winter Temp - winter sq Temp - spring Temp - spring sq Temp - summer Temp - summer sq Temp - fall Temp - fall sq Precip - winter Precip - winter sq Precip - spring Precip - spring sq Precip - summer Precip - summer sq Precip - fall Precip - fall sq Plot area (HA) Log(elevation) Log(Household size) Household with electricity (1/0) Gleyic Luvisols - Fine, Undulating Eutric Gleysols

0.45* (3.00) -0.003 (-0.67) -0.95** (-6.03) 0.01* (2.48) 1.25** (9.42) -0.02** (-9.43) -0.71** (-4.25) 0.02** (5.54) -0.01 (-1.89) 0.00** (5.06) -0.01* (-2.20) 0.0000025 (0.10) 0.02** (6.37) -0.000067** (-5.48) -0.01** (-3.25) 0.000036** (4.00) 0.000067 (0.59) 0.26** (8.13) 0.09* (2.03) 0.23** (4.33) -7.34* (-1.98) -2.54** (-6.57)

Chromic Cambisols Medium, Steep Lithsols - Coarse, Medium, Fine, Steep Ferric Luvisols - Coarse, Undulating Gleyic Luvisols Gleyic Luvisols Medium, Undulating Chromic Luvisols Medium,Undulating, Hilly Luvic Arenosols Coarse, Undulating Lithosols and Eutric Gleysols - Hilly Calcic Yermosols Coarse, Medium, Undulating, Hilly Eutric Gleysols - Coarse, Undulating Chromic Vertisols Fine, Undulating Chromic Luvisols Medium, Fine, Undulating Chromic Luvisols Medium, Steep Dystric Nitosols Lithosolus - Hilly, Steep

-1.54* (-2.51) -5.20* (-1.99) 1.09** (8.69) 0.84* (2.60) 0.78* (2.96) 0.53 (1.00) -4.70** (-3.76) 7.25* (2.54) 2.74** (5.28) -2.71 (-1.51) 0.6 (1.06) -0.27 (-0.61) -0.52 (-0.31) -1.02* (-2.06) -0.06

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Variable

Coefficients

Variable

Coefficients

(-0.09) Orthic Luvisols Medium, Hilly Flow- winter Flow - winter sq Flow - spring Flow - spring sq Flow - summer Flow - summer sq -1.5 (-1.21) -1.67
(-1.73)

Flow - fall Flow - fall sq Constant

-0.8 (-1.17) -0.05 (-0.06) 2.12* (3.20) -1.24**

(-4.83) 0.11** (4.55) 1.22** (5.58) -0.08* (-3.28) -4.18** (-3.73) 10915 -2122.1 0.56

N Log pseudolikelihood R2

Dependent variable is whether or not irrigation is utilized in a plot. * p<0.05; ** p<0.01. z statistics are in parenthesis. Soil texture: Coarse soils have less than 18% clay and more than 65% sand, Medium soils have less than 35% clay and less than 65% sand, and Fine soils have more than 35% clay. Soil slope: Undulating with less than 8% slope, Hilly with slopes between 8% and 30%, and Steep with more than 30% slope.

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Table 3: Conditional income regressions


Model Variables Irrigated Model Corrected OLS Rainfed Model Corrected OLS

Temp - winter Temp - winter sq Temp - spring Temp - spring sq Temp - summer Temp - summer sq Temp - fall Temp - fall sq Precip - winter Precip - winter sq Precip - spring Precip - spring sq Precip - summer Precip - summer sq Precip - fall Precip - fall sq Plot area (HA) Log(Household size) With electricity (1/0) Gleyic Luvisols

97.0 (0.60) -1.69 (-0.44) -93.2 (-0.47) -0.60 (-0.15) 1188.1** (3.42)

142.4 (1.05) -2.65 (-0.74) -165.4 (-1.07) 0.68 (0.19) 1287.9** (4.74) -20.16** (-4.48) -1653.8** (-4.31) 31.28** (4.35) 10.47 (1.75) -0.05 (-1.42) -9.71 (-1.53) 0.09* (2.27) 27.87** (6.46) -0.10** (-5.82) -26.85** (-6.25) 0.09** (5.92) -0.14* (-2.31) 44.28 (.79) 412.9** (4.36)

-128.2* (-2.51) 4.33** (3.31) 4.3 (0.05) -1.98 (-1.09) 214.2* (3.24) -2.99* (-2.36) -82.6 (-1.47) 1.13 (0.95) -2.60* (-2.20) 0.02* (2.75) 3.71** (3.41) -0.01 (-1.44) 4.09** (6.08)

-123.4* (-2.43) 4.25* (3.25) -4.7 (-0.05) -1.84 (-1.03) 224.7** (3.51) -3.19* (-2.60) -92.4 (-1.70) 1.37 (1.20) -2.74* (-2.33) 0.02* (3.01) 3.78** (3.50) -0.01 (-1.59) 4.21** (6.27) -0.02** (-5.39) -1.28* (-2.32) 0.01** (5.65) -0.29** (-4.53) 23.25* (2.12) 125.5** (8.03) -103.2* (-2.70)

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-18.16* -0.10** (-4.88) -25.35** (-5.00) 0.08** (4.98) -0.15* (-2.39) 41.68 (.74) 387.4** (3.66)

(-3.02) -1580.4** (-3.63) 29.43** (3.47) 12.03 (1.80) -0.06 (-1.44) -10.31 (-1.61) 0.09* (2.30) 26.25** (4.98)

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-0.02** -(5.29) -1.21* (-2.15) 0.01** (5.53) -0.29** (-4.54) 22.46* (2.05) 124.1** (7.84) -111.2* (-2.89)

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Luvic ArenosolsCoarseUndulating Eutric GleysolsCoarse Undulating Chromic Vertisols-Fine Undulating Chromic Luvisols-Medium Fine Undulating

-357.0** (-4.60) -1554.0* (-2.25) -1910.2* (-2.81) -2045.5** (-3.81) -1857.5* (-2.80) -405.4** (-4.54) -708.3** (-3.51) -315.1** (-8.79) -6495.5* (-2.92) (5.28) -352.7** (-8.40) -1885.7** (-3.81) -7.8

-397.0** (-5.56) -423.7** (-4.75) -711.4** (-3.53) -304.9** (-8.72)

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-6510.5* (-2.94) 7528.3** (5.39) -877.9* (-3.29) -102.2 (-0.80) 4361.7* (2.72) 1787 0.25 68.47

Chromic Luvisols-Medium Steep Dystric Nitosols Lithosolus Hilly Steep Orthic Luvisols Medium Hilly Inverse Mills Ratio Constant

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7410.2** -922.4** (-3.51) -369.5** (-8.96) -1907.0** (-3.86)

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4141.1*

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(-0.62) 9128 0.16 51.11

N R-squared F-stat
Note:

Dependent variable is net revenue per hectare. * p<0.05; ** p<0.01, t-statistics in parenthesis. Soil texture: Coarse soils have less than 18% clay and more than 65% sand, Medium soils have less than 35% clay and less than 65% sand, and Fine soils have more than 35% clay. Soil slope: Undulating with less than 8% slope, Hilly with slopes between 8% and 30%, and Steep with more than 30% slope.

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Table 4: Marginal Climate Impacts Selection Model (Irrigation Choice) Temperature

Precipitation mm/mo -0.002 (0.005) -0.01 (0.004) 0.01 (0.002) -0.002 (0.002) -0.01 (0.004)

Flow million m3/mo -2.49 (0.83) 1.47 (0.85) -0.9 (0.28) 0.91 (0.20) -1.06 (0.58)

Winter Spring Summer Fall Annual

0.34 (0.062) -0.52 (0.068) 0.08

Marginal effects calculated from coefficients in Table 2. Conditional Income Irrigated Farms Temperature

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Precipitation

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Temperature Precipitation mm/mo -2 (1) 3 (1) 1 (0.3) 1 (0.4) 3 (0.6)

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Winter Spring Summer Fall Annual

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(14) -97 68 (14) -33 (15) -7 (4) (16)

Marginal effects calculated from corrected coefficients in Table 3 columns (a) and (c). Marginal effects estimated using the climate of each observation. The mean and standard deviations calculated using bootstrapping (350 repetitions). 27

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Table 5: Country Fixed Effects Regressions Choice Model Temp - winter Temp - winter sq Temp - spring Temp - spring sq Temp - summer Temp - summer sq Temp - fall Temp - fall sq Precip - winter Precip - winter sq Precip - spring Precip - spring sq Precip - summer Precip - summer sq Precip - fall Precip - fall sq Plot area (HA) Log(elevation) Log(Household size) Household with electricity (1/0) Gleyic Luvisols Fine, Undulating 0.18 (0.98) 0.0015 (0.31) -0.89** (-4.35) 0.01* (2.03) 1.10** (5.80 -0.02** (-5.94) -0.57* (-2.59) 0.02** (3.93) -0.01 (-1.28) 0.00012** (3.92) -0.01* (-2.23) -0.000005 (-0.17) 0.01* (2.33) -.00002 (-1.57) -0.00002 (0.42) -0.000007 (-0.65) 0.00008 -(0.73) 0.13* (2.86) 0.10* (2.23) 0.10 (1.62) -7.08 Corrected Irrigated Farms 2.8 (0.01) 8.68 (1.55) 68.0 (0.29) -8.26 (-1.57) 946.1* (2.34) -11.79 (-1.73) -1528.7* (-3.19) 25.07* (2.76) -1.42 (-0.14) 0.01 (0.27) -8.55 (-0.89) 0.08 (1.62) 23.12* (2.62) -0.09* (-3.08) -22.88* (-2.58) 0.08* (3.11) -0.16* (-2.53) Corrected Rainfed Farms -56.4 (-0.90) 2.21 (1.48) -73.8 (-0.72) 0.47 (0.23) 99.1 (1.38) -2 (-1.47) -59.8 (-1.01) 1.59 (1.31) 1.34 (0.97) -.004 (-0.68) 0.43 (0.35) -.0009 (-0.17) 2.31* (2.75) -0.01* (-2.09) 0.17 -(0.22) .0006 (0.25) -0.21** (-3.39)

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Eutric Gleysols Chromic Cambisols - Medium, Steep Lithsols - Coarse, Medium, Fine, Steep Ferric Luvisols Coarse, Undulating Gleyic Luvisols Gleyic Luvisols Medium, Undulating Chromic Luvisols Medium,Undulating, Hilly Luvic Arenosols Coarse, Undulating Lithosols and Eutric Gleysols - Hilly Calcic Yermosols Coarse, Medium, Undulating, Hilly Eutric Gleysols Coarse, Undulating Chromic Vertisols Fine, Undulating Chromic Luvisols Medium, Fine, Undulating Chromic Luvisols Medium, Steep Dystric Nitosols Lithosolus - Hilly, Steep

(-1.76) -2.04** (-4.35) -1.35* (-2.31) -5.63* (-2.11) 1.09** (8.64) 1.23** (3.57) 1.17** (4.15) 1.58* -86.70* (-2.01)

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0.88 0.51 0.91

-4.76** (-3.83) 7.46* (2.44) 2.70** (5.22) -2.22 (-1.25)

(-0.02) -1.27* (-2.07)

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(2.52)

-359.0** (-3.64)

ee
-2648.0* (-3.27)

rR ev
95.9 273.5 -(0.30) -(1.15) -634.0* (-2.99) -35.4 (-0.93) -8109.0** (-3.64) 7383.8** -(5.1) -244.7 (-0.68) -58.1 (-1.08)

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(1.41)

(1.17) -0.03

(1.23)

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60

Orthic Luvisols Medium, Hilly Flow- winter Flow - winter sq Flow - spring Flow - spring sq Flow - summer Flow - summer sq Flow - fall Flow - fall sq

-1.97 (-1.72) -1.97 (-1.71) -0.97 (-1.21) -0.21 (-0.19) 2.07* (2.61) -0.76 (-1.73) 0.04 (1.32) 0.83* (2.98) -0.02 (-0.68)

-1995.6** (-3.85)

Inverse Mills Ratio Constant Burkina Faso Ghana Cameroon Ethiopia Kenya Niger Senegal Zimbabwe Zambia

R-squared N F Wald chi2(55) Log pseudolikelihood Notes Pseudo R2

Fo

-1.65 (-1.30) 0.02 (0.05) 0.37 (0.98) 1.77*** (4.70) 0.62 (1.61) 1.03* (2.69) -0.11 (-0.25) -0.36 (-0.84) 0.46 (1.58) -0.17 (-0.45) 0.58
10915

1512.13 -2053.96

rP

100.98 (0.85) 6754.5** (3.59) -1608.8* (-3.24) -1599.7* (-3.08) -1469.0* (-2.85) -1776.2** (-3.75) -1431.6* (-2.96) -2398.6** (-4.62) -1840.3* (-3.26) -881.0* (-2.77) -1071.4* (-2.68)
0.26 1787 41.93

8.26 (0.65) 1202.8* (2.41) -9.6 (-0.06) -55.7 (-0.37) 345.8* -(2.36) -265.3 (-1.78) -318.0* (-2.34) -183.8 (-1.23) -64.3 (-0.43) -25.3 (-0.21) -293.4* (-2.37)
0.20 9128 46.59

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Table 6: Marginal Climate Impacts With Fixed Effects Selection Model (Irrigation Choice) Temperature

Precipitation mm/mo -0.003 (0.01) -0.01 (0.005) 0.01 (0.002) -0.00003 (0.002) -0.01 (0.01)

Flow million m3/mo -3.09 (1.1) 1.4 (1.29) -0.6 (0.51) 0.77 (0.29) -1.54 (0.66)

Winter Spring Summer Fall Annual

0.26 (0.09) -0.46 (0.09)

Conditional Income Irrigated Farms Temperature

Fo
C 274 (177) -233 (166) 408 (158) -430 (181) 28 (27)

0.08 0.17

(0.08) (0.09) 0.06 (0.02)

rP ee
mm/mo -6 (15) -2 (12) 14 (8) -16 (9) -9 (11)

Conditional Income

Irrigated Farms Precipitation

rR

Conditional Income Rainfed Farms Temperature

Conditional Income Rainfed Farms Precipitation mm/mo 1 (1.4) 0.3 (1.1) 0.7 (0.4) 0.3 (0.5) 2.4 (0.7)

ev

iew

Winter Spring Summer Fall Annual

39

(19) -53 -1 (19)

(16) 10 (19) -3 (6)

Note: Marginal effects calculated from coefficients in Table 5. Marginal effects estimated at each observations climate. Means and standard deviations calculated using bootstrapping (350 repetitions). 31

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Table 7: Irrigation and Welfare Results Across Three Climate Change Scenarios Exogenous OLS 483 Exogenous Corrected 483 Endogenous (with Flow constant) 483 Endogenous (with flow adjusting to climate) 483

Irrigation Baseline Income PCM Scenario Probability of Irrigation in expected welfare ($/ha)* in expected welfare (%) CCSR Scenario Probability of Irrigation in expected welfare ($/ha)* in expected welfare (%)

16% 65 (100)

16% 44 (119) +9%

56% 169 (314) +35%

44% 115.5 (299) +24%

CCC Scenario Probability of 16% 16% 14% 14% Irrigation in expected -263 -276 -278 -288 welfare ($/ha)* (70) (75) (75) (68) in expected -54% -57% -58% -60% welfare (%) Standard deviation in parenthesis calculated from bootstrapping. Exogenous calculation uses current irrigation probabilities and OLS or corrected conditional results. Endogenous calculation uses predicted future irrigation probabilities and corrected conditional results.

Fo
+13% 16% -196 (53) -41%

rP

16% -206 (64)

13% -211 (68) -44%

13% -216 (63) -45%

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Appendix A: Mean temperature and Precipitation by Countries in Sample Table A1: Temperature (C) Normals (Sample Means)
Seasonal climates have been adjusted so that they are consistent regardless of hemisphere.

Country Burkina Faso Cameroon Egypt Ethiopia Ghana Kenya Niger Senegal South Africa Zambia Zimbabwe Total

Winter 23.6 19.4 11.7 18.6 21.8 18.8 26.3 24.5 11.5 16.7 16.6 19.8

Spring 28.3 21.4 13.2 21.5 24.8 19.7 30.8 29.1 15.5 21.7 21.3 23.4

Summer 28.9 20.0 24.1 19.7 22.6 18.4 33.9 31.5 20.7 21.1 22.5 24.5

Fall 24.5 18.9 23.4 18.1 21.2 19.1 29.2 26.7 19.4 19.6 20.6 22.2

Table A2: Precipitation (mm/mo) Normals (Sample Mean)


Seasonal climates have been adjusted so that they are consistent regardless of hemisphere.

Fo
Winter 2.6 60.3 12.8 19.4 30.9 88.4 0.8 2.2 1.8 48.3 7.5 25.9

rP
Spring 15.8 101.9 7.0 49.2 59.7 103.0 3.2 1.1 55.0 57.7 15.4 39.8

Country Burkina Faso Cameroon Egypt Ethiopia Ghana Kenya Niger Senegal South Africa Zambia Zimbabwe Total

Summer 113.8 185.1 2.3 123.7 112.4 84.3 64.1 47.9 86.4 108.6 138.8 96.1

Fall 133.1 228.6 3.5 117.5 111.7 60.0 70.6 112.7 68.8 100.7 90.0 102.4

Table A3: Flow (million mm3/mo) Normals (Sample Mean) Winter Spring Summer Fall Country Burkina Faso 0.03 0.01 0.04 0.11 Cameroon 0.32 0.23 0.67 1.21 Egypt 3.08 2.66 7.60 11.17 Ethiopia 0.11 0.11 0.45 0.63 Ghana 0.23 0.13 0.47 0.95 Kenya 0.12 0.16 0.21 0.16 Niger 0.20 0.07 0.47 1.23 Senegal 0.07 0.01 0.15 0.51 South Africa 0.02 0.02 0.06 0.06 Zambia 0.41 0.16 2.40 2.92 Zimbabwe 0.12 0.09 0.52 0.61 0.43 0.33 1.18 1.78 Total

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Figure 1: Temperature response functions of irrigated and rainfed farms


Temperature Response Functions
1500

Predicted net revenue of dryland farms

1000

500

r Fo
18 20

0 16

22

24

26

Temperature (Celcius) Irrigated Farms

Figure 2: Precipitation response functions of irrigated and rainfed farms


Precipitation Response Functions
2250

Pe

Dryland Farms

er

Re

Predicted net revenue of dryland farms

2000 1750 1500 1250 1000 750 500 250 0 80 130

vi ew
180 230

Precipitation (mm) Irrigated Farms Dryland Farms

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