Economic impacts of climate change on teff production in Lume and Gimbichu Districts of Central Ethiopia

Abstract

This study was carried out with the main objective of analyzing the economic impacts of climate change on teff production in central Ethiopia. Specific objectives of the study were: i) To analyze the relationship of income from teff (Eragrostis tef) production with biophysical and socioeconomic variables, ii) To determine the marginal impact of temperature and rainfall on income from teff production, iii) To predict a range of potential future impacts on teff production under a mid-range emission scenario. The study used data collected from a randomly selected sample of 150 smallholder teff producers in Lume and Gimbichu districts from March 2013 to May 2013. The study assessed descriptively farmers‟ perceptions on climate change in terms of long-term change in climate variables including temperature and rainfall, and adaptations undertaken in teff production. The study used a cross sectional Ricardian approach to analyse the impact of climate change on net revenue from teff production. Net revenue per hectare per year for teff crop was regressed against climate predictor, biophysical and socioeconomic control variables. The results indicate that predictor variables had a significant influence on net farm returns from production. The marginal impact analysis revealed that temperature will have a significant (p < 0.01) negative impact on annual net revenue from teff. Rainfall will have a positive impact on net revenue from teff production. Based on a mid-range IPCC‟s emission A1B scenario for the country, the predicted future climate change will adversely impact on net revenue from teff for all time periods of near, mid and far century. Investment in research on teff improved technologies, and transfer of such adaptation technologies to teff smallholder farmers through improved extension services are recommended from this study as to increase farmers‟ adaptive capacity to reduce the impact of climate change on teff production.