Is long-term climate change beneficial or harmful for rice total factor productivity in Japan: evidence from a panel data analysis

Under global warming, influences of heat stress and flooding on rice production are becoming critical in Japan, but it is still under discussion whether future climate change is beneficial or harmful for Japanese rice production. This study aims to evaluate the impacts of long-term climate change on rice total factor productivity (TFP) by a panel data analysis. We estimate a regression model to link rice TFP to climate factors via yield, quality, and flood influence by using crop models, and then project future TFP levels from the results of the high-resolution model for interdisciplinary research on climate (MIROC). The results demonstrate that climate change has a positive effect in the northern regions, such as Hokkaido and Tohoku, but it decreases rice TFP in other regions, especially in the western regions, after the 2050s. Furthermore, climate change increases fluctuations in rice TFP of the western regions. To overcome negative impacts, a forward shift in the rice transplanting time is effective. Second, the potential impacts of climate factors, shown by the elasticity values of rice TFP, are 0.18 (via yield), 0.09 (via quality), and -0.03 (via flood influence), but these climate impacts are weaker than socio-economic factors, such as economies of scale and research and development capital stocks. Third, regional gaps in rice TFP are enlarged over time because of different impacts of climate factors as well as socio-economic factors. Such fact-findings can be used to reconsider agricultural policy.