Ag trade can aid climate change adaptation, economist says

By Stephen Davies

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WASHINGTON, Feb. 16, 2016 - Integrating agriculture more fully into the global marketplace will help farmers and the world's poorest people adapt to the rising temperatures that accompany climate change, a Purdue University agricultural economist said this past weekend at the annual meeting of the American Association for the Advancement of Science.

“Integrating agriculture more tightly into the trading system is a potentially important source of adaptation and one reason to argue for trade liberalization,” said Thomas Hertel, founder and executive director of the Purdue-based Global Trade Analysis Project, or GTAP. “We're going to regret it if we don't spend more effort to integrate our global agricultural economy.”

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Such an effort is occurring right now, as the Obama administration, joined by many in the ag community, push for congressional passage of the Trans-Pacific Partnership.

Hertel focused on corn in his presentation, identifying 84 degrees Fahrenheit (29 degrees Celsius) as the “critical threshold” above which yields begin to suffer. (He referred to temperatures below that threshold as “good heat,” and temperatures above it as “bad heat.”)

“When you start accumulating growing degree days above that (threshold), you get a very sharp falloff in yields,” he said. “This is what we saw in 2012. We had hot, and we had dry, and we had very significant yield losses in corn.”

Corn is especially vulnerable to extreme heat, Hertel said. “What's really driving increased volatility under future climate are these potentially extremely hot events” - several days or more of unusually hot, harmful weather conditions.

“What's really driving increased volatility in the future are these potentially extremely hot events” - several days or more of unusually hot, harmful weather conditions.

Plant breeders are working to increase the temperature threshold where yields start to suffer, Hertel said. Another strategy is to migrate corn northward if soils and infrastructure permit, “but you'd have to migrate it quite a bit in order to offset (yield) volatility.”

“I think it's fair to expect increased yield volatility in the future,” Hertel said. “The concern, of course, is that will give rise to price volatility.”

Another important factor driving volatility is the Renewable Fuel Standard mandate, he said. 

In 2012, for example, depressed yields caused a spike in corn prices, which in an economist's ideal world should have led to the shuttering of some of the ethanol plants in the Midwest, at least temporarily.

“What happened?” Hertel asked. “We didn't shut them down. The (RFS) mandate prevented us from shutting them down.” Instead of mitigating some of the price volatility, “we exacerbated it,” he said, calling the RFS an example of “maladaptation from the economic point of view, because it doesn't adjust to scarcity.”

Climate change has some potential benefits for agriculture, Hertel said. Increased carbon dioxide in the atmosphere leads to increased water efficiency, but only when the soil is not nutrient-deficient, he said.

Unfortunately, said Hertel, that's the case in many tropical regions of the world that would be most affected by climate change. “We may be overstating the potential benefits here unless they can overcome these nutrient constraints,” he said.

In the short term, the effects of climate change on global agriculture will vary depending on region. But once 2050 rolls around, the outlook becomes grimmer, Hertel said.

“In the current environment, it's great if you're in Canada - you can plant earlier,” Hertel said. But many studies understate the impacts on the world's poorest areas by exaggerating their ability to adapt.

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There are five major impacts from climate change, Hertel said: shortened growth stages; a fall-off in photosynthesis rates; direct damage to plant cells; increased water stress; and more damage from pests and disease.

Some producers are already adjusting to the changing climate, said Bruce McCarl, an agricultural economics professor at Texas A&M. “There's a lot more corn in North Dakota than there used to be,” he said. In addition, “We're raising smaller varieties of cattle in Texas than we used to, because the smaller animals handle heat better.”

McCarl spoke out in favor of more research money to deal with the changing climate. In the past, research money was used to increase yields. “Currently you also have to spend some of that money on maintaining what you have,” he said.

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