Climate change and soil conservation

Limiting the impact of climate change on agriculture is a major goal of the European Union. This requires the evaluation of farm-level adaptation measures, available within the Common Agricultural Policy. We investigate how the adoption of soil conservation measures by farms in Austrian arable regions affects their economic performance. By applying an endogenous switching regression model to panel data, we find that climatic conditions significantly influence the decision on whether to adopt soil conservation measures. The net revenue of adopters is less sensitive to long-term temperature and precipitation changes than for non-adopters. The measures are profitable for a majority of farms. However, profitability is linked to baseline climatic conditions, with negative effects in cool, wet regions and significantly greater positive effects in warm, dry regions.