The Impact of Climate Change on Rice Production in Nepal
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The Impact of Climate Change on Rice Production in Nepal Veeshan Rayamajhee 1
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& Wenmei Guo & Alok K. Bohara
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Received: 6 June 2020 / Accepted: 18 September 2020/ # Springer Nature Switzerland AG 2020
Abstract
Using panel data from Nepal Living Standard Surveys (NLSSs) from 2003 and 2010, this study investigates the impact of climate change on rice production in Nepal. Specifically, we use stochastic frontier model and incorporate both technical inefficiency and spatial filtering technique to estimate the impact of increases in average and extreme rainfall and temperatures on annual rice production. Our central finding is that a 1°C increase in average summer temperature results in a 4183 kg reduction in rice production. However, we find no evidence of such impact for increases in extreme temperature days. On the other hand, although we do not find a direct link between increases in average monsoon rainfall and rice production, our results show that extreme rainfall variation hurts productivity. Moreover, we find that a large majority of agricultural households in rural Nepal practice technically inefficient production methods. Households in districts with higher road and river densities are more technically efficient despite climate challenges, which suggests that improved irrigation and market access are needed for climate adaptation. Keywords Climate change . Rice production . Spatial filtering . Technical inefficiency . Nepal JEL Classifications Q54 . Q56 . Q58 . Q12 . Q15 The disproportionate impacts of climate change on the poor living in rural areas of developing countries are well documented (Hallegatte et al. 2015; Burgess et al. 2017; Hallegatte and
* Veeshan Rayamajhee [email protected] Wenmei Guo [email protected] Alok K. Bohara [email protected] Extended author information available on the last page of the article
Economics of Disasters and Climate Change
Rozenberg 2017; Barbier and Hochard 2018; Hsiang et al. 2019). These impacts are particularly severe among populations living in less-favored agricultural areas (LFAAs), characterized by difficult terrain, poor soil quality, or limited rainfall and with limited market access. As such, less-favored agricultural areas are prone to low agricultural productivity and severe soil degradation (Barbier and Hochard 2018, p. 27, 35). Two broad categories of factors, namely lack of access to credit and technology as well as the non-linearity in damage functions, result in larger marginal damages among the poor populations (Hsiang et al. 2019). Because the poor in LFAAs face marginal environmental conditions and are land-dependent, any exogeneous changes in environmental conditions can push them into poverty-environmental traps (Carter and Barrett 2006; Barbier 2010). Nepal’s mountainous terrain, poor access to infrastructure and markets, and excessive dependence on subsistence agriculture and ecosystem services place the rural Nepalese poor among the most climate vulnerable groups within the LFAAs (Pender and Hazell 2000; Pender 2007). Clim
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