Production of cereals in northern marginal areas: An integrated assessment of climate change impacts at the farm level

Crop production in northern regions is projected to benefit from longer growing seasons brought on by future climate change. However, production also faces multiple challenges due to more frequent and intense extreme weather phenomena, and uncertain future prices of agricultural inputs and outputs. Extensive studies have been conducted to investigate the impacts of climate change on cereals yield change, but integrated assessments that also consider the management and economy of cereal farms have been rare so far. In this study, the effects of climate change-driven crop productivity change on farm level land use dynamics, input use, production management and farm income were considered from the point of view of dynamic decision making of a rational risk averse farmer. We assessed whether a farmer can gain from improved crop yields when using adapted cultivars and managing the farm accordingly. We incorporated crop yield estimates from a process-based large area crop model (MCWLA) run with two climate scenarios into a dynamic economic model of farm management and crop rotation (DEMCROP) to investigate future input use, land use with crop rotation, economic gross margins and greenhouse gas emissions. A time span of 30 years was considered. The model accounts for the yield responses to fertilisation, crop protection, liming of field parcels, and yield losses due to monoculture. The approach resulted in a novel and necessary analysis of farm management, production and income implications of climate change adaptation under different climate and socio-economic scenarios. We analysed the effects of different climate and price scenarios at a typical cereal farm in the North Savo region, which is currently a marginal area for crop production in Finland due to its harsh climate. Crop modelling results suggest a 19-27% increase of spring cereal yields and 11-19% increase of winter wheat yields from the current level until 2042-2070. According to our economic farm level simulations, these yield increases would incentivise farmers towards more intense input use resulting in additional increase of yields by 3-8% at current prices. More land is allocated to barley and wheat, less to set-aside and oat. The economic gross margin would increase significantly from the current low levels. Greenhouse gas emissions from farms were estimated to increase with increasing production, but emissions per quantity produced (measured as feed energy units) would decrease. There is potential for sustainable intensification (SI) of crop production in the region.