Effect of Climate Change on Staple Food Production: Empirical Evidence from a Structural Ricardian Analysis

The structural Ricardian model has been used to examine the links between climate variables and staple food production in the literature. However, empirical extensions considering the cluster-correlated effects of climate change have been limited. This study aims to bridge this knowledge gap by extending the structural Ricardian model to accommodate for spatial clustering of the climate variables while examining their effects on staple food production. Based on nationally representative farm household data in Taiwan, the present study investigates the effect of climate conditions on both crop choice and the subsequent production of the three most important staple foods. The results suggest that seasonal temperature/precipitation variations are the major determinants of staple food production after controlling for farm households' socio-economic characteristics. The impacts of seasonal climate variations are found to be location-dependent, which also vary significantly across the staple food commodities. Climate change impact assessment under four Representative Concentration Pathways (RCPs) scenarios indicates the detrimental effect of climate change on rice production during 2021-2100. Under RCP6.0, the adverse effect of climate change on rice production will reach the high of approximately $2900 in the last two decades of the century. There is a gradual increase in terms of the size of negative impact on vegetable production under RCP2.6 and RCP4.5. Under RCP6.0 and RCP8.5, the effects of climate change on vegetable production switch in signs during the entire time span. The impact of climate change on fruits is different from the other two staple foods. The simulated results suggest that, except for RCP8.5, the positive impact of climate change on the production of fruits will be around $210-$320 in 2021-2040; the effect will then increase to $640-$870 before the end of the century.