The Economic Impact of Climate Change on Plantation Agriculture in Nigeria: Implication for Enhanced Productivity

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Fonta, William M.
Bossa, Aymar Y.
Sylla, Mouhamadou B.
Urama, Nathaniel E.
Edame, Greg E.
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African Economic Research consortium
This study used the Ricardian analytical framework to examine the relative importance of climate normals (average long-term temperature and precipitation) in explaining net revenue per hectare (NRh) for cocoa farms in Nigeria under supplementary irrigated and rainfed conditions. A farm-household survey involving 280 cocoa farmers across seven cocoa-producing states in Nigeria was carried out. Net revenue per cocoa hectare was regressed on climate, household socioeconomic characteristics and other control variables. The results indicate high sensitivity of NRh to climate normals in Nigeria, depending on whether cocoa farms are supplementary irrigated or not. On the average, annual increases in temperature and decreasing precipitations are associated with NRh losses for rainfed farms, whereas it increases for irrigated cocoa farms. Projections of future climate change impacts using different climate scenarios (i.e., 6 CORDEX Regional Climate Models [RCMs] Ensemble between 2036-2065 and 2071-2100, and a 2.50 C increase in temperature only, a 5% decrease in rainfall only, and a uniform 2.50 C increase in temperature and a 5% reduction in precipitation from 2050-2100), suggest a wide range of outcomes on NRh for both rainfed and supplementary irrigated cocoa farms. Specifically, the various climate scenarios predict a fall in NRh for rainfed farms, compared to net gains for irrigated cocoa farms. This clearly shows irrigation as an important adaptation strategy by farmers in Nigeria to reduce the harmful effects of climate change.
cocoa agriculture , , Ricardian valuation, , climate change projections, , Nigeria