Jinxia Wang Center for Chinese Agricultural Policy (CCAP) Chinese Academy of Sciences (CAS)

1. Can China Continue Feeding Itself? The Impact of Climate Change on Agriculture, Water Scarcityand How Farmers Adapt Jinxia Wang Center for Chinese Agricultural Policy (CCAP) Chinese Academy of Sciences (CAS) Co-authors: Robert Mendelsohn, Ariel Dinar, Jikun Huang, Scott Rozelle and Lijuan Zhang

2. Food Security in China • Policy debate: Global food security issues -- Especially in China -- Many studies focus on such issues -- Most research results in China are positive However, All these studies do not consider climate change

3. Global Climate Change • Scientific evidence shows: Rising greenhouse gases planet warming Important to understand the impacts of global warming • Impacts to agriculture Largest and best documented impacts

4. Impacts of Climate Change on Agriculture • Agronomic studies (In China and other developing countries): Climate change  reduces crop yield (-) Assume the same crops in the same place Without considering farmers’ adaptations • Economic studies based on Ricardian model (Africa, South America, Brazil, India, …): Climate change  reduces farmer revenue Except in cool locations and some places with irrigation (Egypt) Considering farmers’ adaptations • So, considering the adaptations, what will happen to China when climate changes?

5. Research Questions • What are the impacts of climate change on agriculture (net crop revenue)? • How do farmers adapt to climate change (irrigation or crop choice)?

6. Presentation • Methodology/Data • Results of the impacts of climate change on crop net revenue • Results of the impacts of climate change on irrigation and crop choice • Conclusions and project justification

7. Economic Approach: Ricardian Model • Regress net revenues (or land values) on climate, soil, characteristics of village and household • Include climate by season in quadratic (second order approximation) form • Examine all farms, rainfed and irrigated farms.

8. Data… • Climate data: - Source: National Meteorological Information Center - Monthly temperature and precipitation from meteorological 733 stations - 1951~2001 - Divide into four seasons: Spring: 3~5; Summer: 6~8 Fall: 9~11; Winter: 12~2 - Calculate the average annual temp. and prec. for each season using data from 1951~2001

9. Data… • Socio-economic Data -- Source: China’s National Bureau of Statistics Nation-wide Household Income and Expenditure Survey -- Sample: Counties having both meteorological stations and HH 8405 HH in 915 villages, 124 counties and 28 provinces

10. Data… • Socio-economic Data -- Net crop revenue by HH: Gross crop revenue (or total sales for each crop) less than All expenditures for production (seed, fertilize, irrigation, pesticide, machinery, plastic sheeting, hired labor and custom services, not including land rent and family labor) Return to land and family labor -- Household and village characteristics Education level of household members Family’s land area Topographical environment of each village (plain or mountain) Irrigation status (share of irrigated areas) Easy to access to market (road, distance to township government)

11. Data • Soil Data -- FAO -- Clay, sand and loam soils -- Share of cultivated areas with each type of soil at county level

12. Average Annual Marginal Impacts of Climate Change on Net Crop Revenue in China Changes of net revenue due to minor change of climate (USD/ha) Minor increase of temperature will reduce the net revenue of all farms, especially for rainfed farms; however, minor increase of precipitation will increase the net revenue of all farms

13. Marginal Temperature Effect, Irrigated Farms Warmer temperature are more beneficial in the Southeast and southwest region. Farms in the Central region enjoys mild benefits from warming, however, the far north will be damaged by warming

14. Marginal Precipitation Effect, Irrigated Farms Almost all Irrigated farms enjoy small benefits from increased rainfall

15. Marginal Temperature Effect, Rainfed Farms Warming is likely helpful to rainfed farmers in very cold places but it will likely harm rainfed farmers in most of China and especially the far south

16. Marginal Precipitation Effect, Rainfed Farms More rain is likely to be harmful to rainfed farmers in the wet southeast but will benefit farmers in the remaining regions

17. Summary: Impacts of Climate Change on Net Crop Revenue in China • The average impact of higher temperature is negative and the average impact of more precipitation is positive; • However, effects will vary by region; • Rainfed farmers are more vulnerable than irrigated farmers; • Irrigated farmers are less sensitive to temperature and gain from increased rainfall.

18. Advantage of Economic Approach and Its Limitation • Advantage of the Economic Approach (Ricardian model) -- It provides an estimate of the benefits derived from adaptation -- After considering adaptations, farmers’ losses from warming will be greatlyreduced and even slightly gain especially for irrigated farms -- The results of crop model can be treated as without adaptation • Limitation on the data -- Do not know how much water farmers used in irrigation, cannot quantify the effect of water in the economic model -- If climate change does reduce water supplies, there will be harmful impacts on agriculture

19. Trend of Discharges at Aixinzhuang Station：Lower Haihe River Basin

20. Serious Dry-up Issues in the Downstream of the Yellow River

21. Increase of Groundwater Irrigation in Northern China Percent of groundwater irrigated area

22. Hebei: Falling Shallow GW Table

23. Hebei: Falling Deep GW Table (1980-98) County Meter/year

24. Changes of Water Uses in China

25. China is facing a water crisis • At least that is the perception of some scholars and policy makers inside and outside of China • Senior agricultural and water policy officials claim that water shortages pose the largest challenge to China’s agricultural sector in the 21st century • Some researchers say it will seriously disrupt food production in China

26. Data set 1: 2004 North China Water Resource Survey (NCWRS): 6 provinces, 50 counties, 400 villages Inner Mongolia Liaoning Shanxi Hebei Henan Shaanxi Data set 2: 2001/2004 China Water Institutions and Management (CWIM) Panel 2 provinces, 9 counties, 48 villages (village leaders, groundwater managers, surface water managers, & farm households)

27. Groundwater Levels are Falling, but Varies across Northern China Change in Average Water Level 1995-2004 （1995-2004） • Increased: 16% • No Change: 18% • Decreased < 0.25 m/year ： 17% • Decreasing 0.25 to 1.5 m/year : 40% • Decreasing > 1.5 m/year : 8% 52% 52%

28. Our findings on water scarcity and government and farmers’ response… • There is a water scarcity… but, the scarcity is not everywhere! There are many parts of China in which water resources have not deteriorated over time … • 1/2 of North China is suffering from rapidly falling groundwater tables • Facing with a water crisis, the government has begun to made a number of institutional and policy responses (such as issuing regulations, reforming irrigation management and establishing water rights), not very effective. • In the future, water crisis will continue to grow especially as competition among users increase and even more so, if there is not an effective implementation of policies

29. Our findings on water scarcity and government and farmers’ response… • Where water is becoming scarce, producers, community leaders are responding Digging tubewells by individuals Developing groundwater market Reducing water use and changing cropping patterns when water price increases Adopting water saving technologies However, faced with water scarcity, some responses are helping, some are hurting Hence, Government cannot ignore response of farmers, in fact they need to use this responsiveness to reduce adverse effects and encourage conservation

30. When Climate Changes, How Farmers Make Response? • How will changes of temperature and precipitation influence irrigation choice? • How will changes of temperature and precipitation influence crop choice?

31. Annual Marginal Effect of Climate Change on Irrigation Choice in China Increasing temperature and precipitation will promote farmers to switch from irrigated agri. to rainfed agri., Chinese farmers are more likely to irrigate when facing lower temperatures and less precipitation

32. Annual Marginal Effect of Climate Change on Crop Choice in China

33. Summary: Adaptation Results • As temperatures warm, move away from cool loving crops towards heat tolerant crops • As precipitation falls, move away from wet loving crops towards drought tolerant crops

34. Conclusions … • Different from pessimistic results of the crop studies, economic results show that the impact of climate change on agriculture are smaller; • The major reason is that economic method implicitly captures the adaptations, such as crop switching, changes in irrigation and other changes that farmers might undertake; • The mildly harmful marginal effect of higher temperature is mainly due to two reasons: -- Large irrigated areas -- Rainfed land in temperate or cool regions • So, irrigation is critical to China’s agriculture system; • If warming forces many irrigated farms to become rainfed farm, the positive results will be reversed

35. Conclusions • The effect of climate change varies by region • It is very important to explore regional adaptation measures (such as water policies) that fit the conditions in each region, rather than uniform national policies • The ability of Chinese farmers to adapt to climate change is very important, government should support adaptation at large So, it is very important to implement adaptation project on climate change!