Date of Graduation

8-2016

Document Type

Thesis

Degree Name

Master of Science in Agricultural Economics (MS)

Degree Level

Graduate

Department

Agricultural Economics and Agribusiness

Advisor

Eric J. Wailes

Committee Member

Jeff Luckstead

Second Committee Member

Mohammad J. Alam

Abstract

Bangladesh is trying to achieve self-sufficiency in domestic rice production but climate change effects on agricultural production makes it challenging to attain the goal. The country is highly vulnerable to the effects of climate change since it is the major cause to rise in sea level, more warm summer, and happening food and cyclone in the country.

This study develops an Aggregate Farm Household Model to analyze the impact of potential land loss and yield reduction from climate change on production, consumption, prices, welfare, and the ability of government to achieve self-sufficiency in rice production. The model is calibrated to the Bangladesh rice market in three alternate scenarios using Household Income and Expenditure Survey, 2010 data. The results show that climate change leads to decline in productivity and increase in price of rice in the domestic markets. The reduction in rice productivity decreases rice production while increases production of other non-rice crops. Simulation with a 25% reduction in arable land and 15% reduction in productivity also found that rice land and non-rice agricultural land are also decreasing day by day. However, the decline in rice production leads to greater imports making food security harder to achieve.

From simulation analysis, rice yield reduces by 12.67% whereas, the rice price increases by 22.38% and imports by 5.20% with decline in rice productivity by 15% and arable land by 25% in Bangladesh. Alternatively, non-rice crop production increases by 0.19% and the price of non-rice agricultural products decreases by 1.33% in the same scenario. Consequently, the rice and non-rice consumption reduces by 2.28% and 26.24% respectively in both alternate scenarios. The change in climate has more negative effects of consumption of non-rice compared to rice because of the subsistence consumption for rice.

In summary, the decline in rice productivity and reduction of arable land leads to a decrease in rice yields, agricultural land and consumption of rice, non-rice agricultural goods, manufacturing goods, and leisure which leads to a reduction in the welfare for the farm households in Bangladesh.

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