National Workshop on Water Resources and Livelihoods in the Dry Areas Considering Climate

UncertaintyHammamet, Tunisia, 25-26 September 2014

ECONOMIC ANALYSIS OF AGRICULTURAL ADAPTATION TO CLIMATE CHANGE IN ARID AREAS: THE CASE OF ZOGHMAR

(SIDI BOUZID)

HAMED DALY, CAROLINE KING

• Introduction• Objectives• Methods and case study• Results• Discussion• Conclusions

OUTLINE

• The drier central and southern regions are expected to be the most severely impacted by climate change (periodic droughts) and rangeland degradation

• Agricultural land is expected to be unsuitable for cereal cropping : The traditional barley-livestock system is expected be reduced by 80% in drought years (GIZ 2007).

• However, combined livestock and crop net revenue is more climate resilient in Africa (Seo, Mendelsohn et al., 2009)

INTRODUCTION (1)

Suitability to barley cropping A1B SRES A2 SRES1991-2020 93.1% (MS)

6.9% (NS)100% (MS)

2040-2069 93.1% (MS)6.9% (NS)

100% (MS)

2070-2099 77.2% (MS)22.8% (NS)

93.1% (MS)6.9% (NS)

• Annual rainfall (1999-2013) : 229 mm

• Barley grain yield (2002-2012) : 223 kg/ha (CRDA)

Using other models : GCM= HadGEM2-ES/ Crop model= DSSAT

The barley yield may increase due to rainfall patterns change and interaction with CO2 level and other weather parameters: T… (Annabi, preliminary results)Need to Compare many GCM

Climate change and its impacts on barley production : Case of Sidi Bouzid

MS : Marginally suitable, NS : Non suitable - Source : World bank, 2011

• Decision makers need an evaluation of different adaptation options• Irrigation, olive tree plantation and plantation of forage species

• Alternatives could give higher income for farmers but lower social benefits

• Thus, there is a need for public action to avoid negative externalities or increase public benefit

INTRODUCTION (2)

Objectives

- To assess the profitability of these interventions from a private and social perspective- To analyze the contribution of adaptation techniques to improving farmers’ income

Method : Cost-benefit analysis (CBA)

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• A useful tool to analyse individual options, especially those publicly-funded producing both private and public benefits.

• Justify investments for different interventions• Allows comparisons between land use options• May expand to include the range of benefits & costs

• ‘With’ and ‘without’ interventions comparisons

Stages for conducting CBA

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a) Identify the improved alternative impactsb) Quantify impactsc) Estimate costs and benefits d) Predict the magnitude of annual incremental costs &

benefits over the life span of the alternativee) Discountingf) Measure of main indicators g) Sensitivity analysis to consider risks and uncertainties.

• Agricultural surface area : 2400 ha• Sheep livestock production integrated with

pasture and cereal production• Surface area/household : 14.7 ha• Number of ewe/household : 26• Rainfall : 240 mm (1980-2000)• Frequent drought risk : 6 years in a decade• Net income per household (2013) : 5616 TD/year,

mainly from animal production, 28% external to agriculture (INRAT, 2013 survey).

Annual increase : 2.2% (2000-2013) compared to 6.1% for Tunisia

Very high poverty rate : 60% compared to 15.5% for Tunisia (2010) (INS, 2012)

Case study site : Zoghmar (Sidi Bouzid)

Series10%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

44%

28%

6%

19%

Land uses in 2013

Irrigated forages

Olive trees

Cactus plantation

Pasture

Cereals

Source: INRAT Survey, 2013

• Decrease of cereal cropping from 85% of the surface area in 1991 to 44% in 2013• Increase of olive tree plantation form 10% to 19% in the same period• Increase of cactus plantation (6% whole plantation +11% in alley)• Increase of livestock from 20 ewes per farm in 1991 to 26 in 2013

Case study site : Land use changes in Zoghmar

Source: CRDA 1991; INRAT 2005; INRAT Survey, 2013

1991 2002 20130%

10%

20%

30%

40%

50%

60%

70%

80%

90%

CerealsPastureCactus plantationOlive treesIrrigated foragesVegetables

Current land use Alternatives

Rangeland Cactus Cactus in alleyBarley with cactus in alley cropping

Rainfed barley Cactus Barley with cactus in alley croppingOlive tree plantationIrrigated barley

Irrigated barley Irrigated olive trees

a. Adaptation techniques in zoghmar-Sidi Bouzid area

COSTS CONSIDERED BENEFITS CONSIDERED

1. FARMERCOST OF PLANTATIONCOST OF EMPLOYED LABORCOST OF WATERLOSS OF CROPPED AREA

ON SITE INCREASED AGRICULTURAL PRODUCTION

2. NATIONAL SOCIETY

COST OF PLANTATIONCOST OF LABORFULL COST OF WATER (OPPORTUNITY COST + COST OF WATER DEGRADATION)LOSS OF CROPPED AREA

ON SITE AND OFF SITE+. REDUCED EROSION

3. GLOBAL COMMUNITY

ON SITE AND OFF SITE+. CARBON SEQUESTRATION

b1. Identification of costs and benefits

• Survey for valuation of private costs and benefits of different land uses

• Data about yield of barley and olive trees (CRDA)

• Market price for Private valuation• Real price / opportunity cost of labor/ Full Cost of water

for Social valuation

c. Valuation of costs and benefits

RESULTS : COMPARISON BETWEEN DIFFERENT ALTERNATIVE LAND USES IN RANGELANDS : CASE OF

ZOGHMAR

Net present value (NPV) (8%, 20 years) in TND/ha - 2013

Alternative land uses Farmer’s perspective National perspective

Cactus 1220 726Cactus in alley + pasture 1669 800Cactus in alley+ barley 1913 366

Non action : Rangelands

RESULTS : COMPARISON BETWEEN DIFFERENT ALTERNATIVE LAND USES IN RANGELANDS : CASE OF

ZOGHMAR

NPV (8%, 20 years) in TND/ha - 2013Alternative land uses Farmer’s

perspectiveSocial perspective

Cactus 977 943

Cactus in alley 1426 1017

Cactus in alley cropping with barley 1669 583

Irrigated barley 6104 3994

Non action : Rainfed barley

RESULTS : PROFITABILITY OF OLIVE TREES PLANTATION AT FARMER, NATIONAL SOCIETY AND GLOBAL

COMMUNITY PERSPECTIVE : CASE OF ZOGHMAR

NPV (8%, 60 years) in TND/ha - 2013Without intervention

NPV at farmer perspective (DT/ha)

NPV for national society (DT/ha)

NPV at global perspective (DT/ha)

Pasture -2950 -2540 -1925Rainfed barely -3625 -2313 -1698Irrigated barley 2200 982 1776

RESULTS : IMPACT OF CACTUS FEEDING ON FARMER’ INCOME

Sheep breeding (no cactus feeding)

Integrated Sheep breeding + cactus

0

500

1000

1500

2000

2500

3000

3500

4000

Gross margin/household (TND/year)

- A Sensitivity analysis is needed to examine the effects of risks and uncertainties:• Yields (alley cropping)• Water for irrigation• Water erosion, water degradation

- There is a need to improve knowledge, through models and tools, about the effects of climate change on agricultural production and environmental degradation

DISCUSSION

• Plantation of cactus in alley is the best alternative when integrated to sheep breeding.

• In economic perspective, olive trees plantation in rainfed area should not be conducted

• Olive tree plantation in irrigated area is profitable at private and social perspective

• This analysis confirms that integrated livestock, crop and forage net income is more climate resilient.

• Irrigation constitutes the best adaptation alternative at farm perspective, but better information is needed to assess the cost of water degradation.

CONCLUSIONS

Thank you for your attention