Do Farmers Adapt to Climate Change? A Macro Perspective

Greenhouse gas emissions cause climate change, and agriculture is the most vulnerable sector. Farmers do have some capability to adapt to changing weather and climate, but this capability is contingent on many factors, including geographical and socioeconomic conditions. Assessing the actual adaptation potential in the agricultural sector is therefore an empirical issue, to which this paper contributes by presenting a study examining the impacts of climate change on cereal yields in 55 developing and developed countries, using data from 1991 to 2015. The results indicate that cereal yields are affected in all regions by changes in temperature and precipitation, with significant differences in certain macro-regions in the world. In Southern Asia and Central Africa, farmers fail to adapt to climate change. The findings suggest that the world should focus more on enhancing adaptive capacity to moderate potential damage and on coping with the consequences of climate change.


Introduction
Climate change is considered to be an average change in weather patterns in the long-term sense, while climate variability refers to the fluctuations in weather patterns in the short term. Scientists and economists have come to a consensus opinion that agricultural production and crop yields are at risk due to variation and change in the climatic factors [1]. Crops are hit by droughts, floods, heavy or low levels of rainfall, humidity, decreasing water resources, and increasing windstorms. The climatic variability and change could create a shortage of food production in the future, especially in developing countries, which having fewer resources and are lagging far behind in terms of crop yields. It is expected that the world may face the severe problem of food scarcity in the coming years due to climate change. Climate change is becoming a threat to the Sustainable Development Goals (SDGs). The SDGs focus explicitly on food-related issues by seeking to end hunger, achieve food security by fighting against food scarcity and improving nutrition, and promote sustainable agriculture. SDGs also pay particular attention to poverty reduction, for which agriculture and food play a key role in developing countries [2].
A growing body of economic literature has focused on the impacts of climate change on the agriculture sector at a macro level [3][4][5][6][7][8][9][10][11][12][13][14][15][16][17][18]. The common finding of these studies is that climatic changes adversely affect crop yields. However, these studies ignore the farmers' long-term adapting behaviors, resulting in overestimations of the damages caused due to climate change. The adaptive capacity is the ability of a system to adjust to climate change, including climate variability and extremes, to dampen potential damage, take advantage of opportunities, and cope with undesired negative consequences [1]. The adoption of new technologies, such as drought-tolerant seeds, and changing farm practices, such does not consider that farmers believe in the adoption of the strategies which help them to cope with change in climate; i.e., farmers replace those crops with others which are more sensitive to the climate [43,44].
When this limitation of the production function approach could not comply, another model was formulated named the Ricardian model in 1994 by Mendelsohn; in this model the climate was considered the black box in the agriculture sector. This model is used to assess the relationship that exists between outcomes of the agricultural land which a farmer utilizes and climate, which includes cross sectional data, analyzed by repressors and control variables. This model is implicitly considered as the farmer's adaptation model [32].
The weakness of this model, as discussed above, is that the efforts of the farmer cannot be determined in this model, and to overcome this weakness the farmer's efforts are assessed by the mathematical programming developed in the same model [41,45,46]. The main focus was the irrigation of the land [47]. This specification of the models also has limitations, such as the fact that it only considers hypothesized and simulated strategies, which cannot be correct. The most recent application of this model is the addition of the positive mathematical programming method commonly known as positive mathematical programming [48,49].
In recent times many studies have been conducted that show how the limitation of the Ricardian model can be overcome by considering the survey from a farmer's point of view and by applying econometric models. This application of the model uses the adopted strategies of the farmer and its explanatory variables [20,24,50,51]. The adaptation to climate change was first considered in agriculture modeling in the pioneering works of [28,[52][53][54][55][56] in terms of the decision to adapt and examine the impact of climate change in presence of adaptations.
The works of [57,58], empirical and theoretical, considered adaptation in the form of different types of technology adoptions and preventive measures. The technologies under consideration and preventive measures of adaptations are different across studies; therefore, the measures of the impact of adaptations are not comparable. A few comprehensive studies covering multiple regions show that the results of adaptation are considerably different in developed and developing countries, with little gain or net decline in the agricultural production in the developing countries, and net gain in the developed countries [27,28,55,58,59].
Climate changes are unevenly distributed throughout globally, penalizing some parts of the world more than others; some areas are getting benefits from changes in precipitation [3,56]. Undoubtedly, the adaptation practices are related to knowledge and perceptions about the climate change. There is a need for greater investment in research and implementing adaptation strategies to mitigate the risks of climate change [60,61].
Summing it up in a nutshell, just as the impacts of climate change vary from one region to another, the adaptation and its consequences also vary depending on the factors ranging from farmer's characteristics to socioeconomic factors. These factors either limit or improve the farmer's capability to move towards adaptations in order to avoid negative impacts or benefits from climate change. The farmer's decision to move towards adaptations hinges on the perceptions of climate change and the benefits of using new technology, inputs, or techniques requiring investment. The developed countries generally have developed markets for agricultural inputs, including dissemination of information which helps farmers to move towards adaptions and invest in new technology. On the other hand, in developing countries, markets are not developed for the agricultural inputs and the farmers are relatively unaware of the available technologies to avoid the negative impacts of climate change.
The study proceeds as follows. Section 2 presents the material and methods. Section 3 is about results and discussion, and the final section concludes the study.

Climate Change
We used the production function approach to check the impacts of climate change and adaptations on cereal yields. The cereal yields (kg/ha) are related to climatic and non-climatic input variables.
The vector of climatic variables is characterized here by temperature and precipitation (we also used the humidity as a climatic variable, but due to the problem of multicollinearity, we dropped it), while the non-climatic vector is related to capital stock and labor force. The use of capital stock is important in agricultural production, especially in case of the developing countries. The regression is as follows: where y is cereal yields, GDD is growing degree days, Pr is precipitation, K is capital stock, LF is the labor force in the agriculture sector, β i is the time-invariant and individual fixed effects, and α t is the time-fixed effect. When investigating the impact of change, it makes sense to look at the first-order differences [62]. A panel first difference estimation model has been employed that incorporates a set of climatic and non-climatic inputs. This regression method has three advantages. First, it allows us to capture the oscillations in weather patterns; second, it easily addresses the problem of omitted variables in the panel data [63]; and third, it eliminates the time-invariant term and individual country fixed effects. The impact of climate change on cereal yield is therefore estimated as follows: where ∆ indicates the first difference, i index stands for country and t for year, α t is the time dummy variable, and ε is the residual term. (The country's dummy variable is not included in the regression, as it is a first-difference estimator. Inter-country differences cancel out).

Adaptation to Climate Change
The concept of modelling adaptation is not new in the literature. Helson was among one of those who developed a quantitative model of adaptations [64]. More recently, Menz and Korhonen et al. [65,66] investigated the income adaptation by including lagged income into the life satisfaction equation.
To check the impact of growing degree days and precipitation on cereal yield, it is important to understand that both the indicators of climate change are noticeable, gradually. Therefore, it is obvious to include the lags of climate change indicators; otherwise, their impacts will remain overestimated. Thus, the current study critically attempts to include lagged or past values of growing degree days and precipitation so that the truly representative impacts of climate change adaptation may be revealed. By doing so, the model of oscillations in weather patterns is granted. This modelling approach makes this study unique in the literature of climate change adaptation in the agriculture sector because no other method can appropriately estimate the impact.
To investigate whether farmers adapt to climate change or not, we include the lag of growing degree days and precipitation in the difference equation by following the Menz [65] and Korhonen et al. [66]. The model is as follows: where l is the lag length of climatic variables, and the β i,t and γ i,t coefficients represent the first-year effects of growing degree days and precipitation on cereal yields, respectively. The sum of the coefficients of growing degree days, gives the full effect of growing degree days. Similarly, γ i,t + γ i,t−1 + γ i,t−2 + · · · + γ i,t−n gives the full effect of precipitation. We set the null hypothesis of lag-independent climatic variables, β i,t−1 + β i,t−2 + · · · + β i,t−n = 0 and γ i,t−1 + γ i,t−2 + · · · + γ i,t−n = 0.
If the null hypotheses are accepted, then the cereal yield is affected by neither changing the growing degree days nor the precipitation, and resultantly, the farmers are adapting to climate change. This could be interpreted as the result of adaptive behavior, making the output level immune to meteorological contingencies.

Data
Data on the climatic variables (growing degree days (GDD) and cumulative precipitation (pr) were obtained from the World Bank Climate Knowledge Portal [67], for the period of 1991-2015, of 55 countries (The World Bank Climate Knowledge portal provide data at the country level with global coverage). GDD is the sum of heat that a crop receives over the growing period above the lower threshold. The crop-specific upper and lower thresholds are still in debate. Following [16,18,68], the study used 8 • C as the lower threshold. The growing degree days are calculated from the average monthly temperature as follows: Data on the cereal yields by country, on capital stock in agriculture and on labor force were retrieved from the Food and Agriculture Organization [69] database for the same time period. Several summary statistics for each country are reported in Appendix A Table A1.

Impacts of Climate Change on Cereal Yields
The results indicate that climate variability strongly affects the cereal yields. An increase in the growing degree days is negatively correlated with the cereal yields in all regions, except for Southeast Asia ( Table 1). The largest impact is estimated for Southern Europe and Central Africa, at 0.74 and 0.73, respectively, followed by Northern Africa (0.55). As expected, an increase in precipitation has a positive effect on the cereal yields only in Southern Europe, Northern Africa, Central Africa, Southern Africa, and Southeast Asia. However, the impact of increasing precipitation is significantly negative in the Central, Western, and Northern European regions because the above-average rain causes an excess of moisture in the soil which decreases the cereal yield in these regions. The major cereal crop in these regions is wheat which requires less water. The impact of an increase in precipitation is also found to be negative in the Southern Asia region. The reason for the negative impact is a lack of water infrastructure, which results in the flooding of the river basins, especially when there is more rain, particularly in Bangladesh, India, and Pakistan, due to rivers flowing from the top of the Himalayas down to plain irrigated land. The cereal yields are also positively affected by changes in non-climatic explanatory variables that include labor force and capital stock, which are significant in some regions.    Notes: ***, ** and * denote significance at the level of 1, 5 and 10% respectively. Source: Author's own calculations.

Adaptation to Climate Change
The lags of the first differences are introduced in the model to check whether farmers adapt to climate change (Equation (3)). The results indicate that the current impacts of changes in growing degree days are significantly negative in all regions except Northern Europe ( Table 2). The lag effect of growing degree days is insignificant in Southern Europe, Central and Western Europe, Northern Africa, South Africa, and Southeast Asia.   Notes: ***, ** and * denote significance at the level of 1, 5 and 10% respectively. Source: Author's own calculation.
Thus, the null hypothesis, γ i,t−1 + γ i,t−2 = 0, cannot be rejected. This indicates that farmers are taking adaptation measures to change the number of growing degree days. However, Southern Asia and Central Africa are failing to adapt because of the lag effect on growing degree days is significantly negative in these regions. Thus, we reject the null hypothesis of adaptation. Notwithstanding, in Northern Europe, the absolute value of second and third-year lag coefficients of growing degree days (0.11) is statistically significant, positive, and different from zero. This indicates that the Northern European farmers are benefiting from an increase in the growing degree days. The reasons for improvements in the Northern Europe are mainly related to prolonged growing seasons, higher minimum winter temperatures, and an extension of the frost-free period [70].
The first-year impact of precipitation is positive in all the regions except for the Northern, Central, and Western Europe. However, the lag effect of precipitation is significant in the Central Africa, Southern Asia, and Southeast Asia regions, which indicates that these countries have failed to adapt to changes in the precipitation patterns. This is mainly due to their geographical location and dependency on precipitation. Furthermore, they belong to the developing world and it is difficult for them to cope with the changing precipitation patterns due to lack of famers' training, social and human capital, and credit facility [29].
The developed countries are adapting to climate change because in these countries' the government is paying attention to the agriculture sector, such as spending on research and development, education and training, policy relevance to agriculture, information availability, and climate risk identification. The adaptation and its consequences also depend on the factors ranging from farmer characteristics to socioeconomic factors. These factors improve the farmer's capability to move towards adaptations in order to avoid negative impacts; meanwhile, developing countries are lagging far behind in providing such levels of services to their farmers, so it is difficult for them to adapt. South Asia and Southern Africa are two regions highly sensitive to climate changes, and hence demand more adaptation practices.

Conclusions
Given the importance of climate change and farmers' adaptation, the present study examines the impact of climate change on the cereal yields for 55 developing and developed countries. The present study divides the selected countries into eight regions. The estimated results indicate that the cereal yields are affected in all regions by the change in the growing degree days and precipitation. The adaptation regression model has been used. This approach considers the lag effects of the climatic factors. It is found that the farmers of the South Asian and Central African countries are failing to adapt to the changes in growing degree days and precipitation. Moreover, the Southeast Asian countries are sensitive to the change in precipitation. The Central and Western European, Southern European, Northern European, North African, and South African countries are adapting to climate change. However, the Northern European countries are growing more crops due to the increase in growing degree days. Improvements in Northern Europe are mainly related to prolonged growing seasons, higher minimum winter temperatures, and an extension of the frost-free period. The results of this study also indicate that regions of high social and economic status, and the ones that are less vulnerable to climate change, are adapting to climate change. Countries that are developing and vulnerable to climate change are failing to adapt.
This study suggests that the world should focus on adaptive capacity to moderate potential damage and cope with the consequences of climate change and variability in the agriculture sector. The adoption of new technology and improved seeds, cultivating more land, relaxing trade barriers, and changing farms' practices could be useful for mitigating the negative impacts of climate change and variability.
Notwithstanding, the developing countries need to take urgent adaptation measures to minimize the losses associated with climate change and to feed the growing population, especially in Central Africa and South Asia. In particular, there is a need to improve the water infrastructure and storage capacity in South Asia. Moreover, there is a global need to decrease the GHG emissions immediately.
Further, to achieve the SDGs, countries and communities need to develop adaptation solutions and implement actions to respond to the impacts of climate change that are already happening, as well as prepare for future impacts. Successful adaptation not only depends on the governments but also on the active and sustained engagement of stakeholders, including national, regional, multilateral, and international organizations; the public and private sectors; civil society; and other relevant stakeholders, and on effective management of knowledge.
One caveat of this study is that we have used only two climatic variables, precipitation and temperature, while ignoring the other variables due to non-availability of data at the country level, such as wind speed and humidity. Thus, the model may underpredict the situation. It is important to examine farmers' adaptation strategies and their impacts on each crop's yield at a country level. However, this topic is left for future research.