The effects of climate change and climate variability on economic surplus of producers and consumers in the agricultural sector of Hamadan– Bahar plain

Document Type : Research Paper


1 Department of Agricultural Economics, Faculty of Agriculture, Tarbiat Modares University, Tehran, Iran.

2 Department of Agricultural Economics, Faculty of Agriculture, Tarbiat Modares University, Tehran, Iran


The occurrence of climate change and variability, through changes in the supply and price of crops, overshadows the profitability of production in this sector and the share of food in consumer income. Therefore, social surpluses would fluctuate with physical and economic access to food. Accordingly, to make effective policies to adapt to new climatic conditions, accurate estimates of the welfare changes that will occur as a result of climatic events are needed. According to this approach, in the present study, the potential effects of different climatic scenarios on the cultivation pattern of the Hamadan-Bahar plain were investigated, and the impact of water resources, production, and food security in the agricultural sector of this plain was evaluated. The results showed that with the combined effect of climate change and variability, along with a 44% increase in agricultural consumption from the aquifer of this plain during the 20-year planning period, the present value of consumer and producer surplus and also, total economic welfare in the region's agricultural sector would decrease by 27%, increase by 16% and decrease by 4% compared to the baseline conditions, respectively. Therefore, it will be inevitable to adopt strategies to adapt to this phenomenon to mitigate its negative effects on food security in the region.


Main Subjects

Extended Abstract


The various pillars of food security are affected by climate change. Because food production depends on the availability of water resources, these resources are also affected by climatic conditions. Also, the optimal growth and yield of crops occurs in a certain range of climatic variables, so climate change can change this optimal range. In addition to changing the average value of climatic measures, the distribution of these measures around the average also affects the agricultural sector's production. These conditions overshadow the change in the supply and price of agricultural crops and, consequently, the change in the profitability of production in the agricultural sector, as well as the share of food in consumer surplus. Therefore, social surpluses would change with physical and economic access to food. According to this approach, in the present study, the potential effects of climate changes and climate variabilities on the cultivation pattern of the Hamadan-Bahar plain were investigated, and the change in crop yield, water resources, and subsequent changes in food welfare and food security in the agricultural sector of the plain was assessed quantitatively.



In this study, a cumulative biophysical-economic model was used. In the economic dimension of this model, the dynamic, positive mathematical programming approach in endogenous price conditions was used. The experimental model, consisting of 18 crops and two types of irrigation technologies, was developed based on the information of 2018 as the base year and in a 20-year planning horizon. This model's objective function is maximizing the present value of total economic welfare in the form of the sum of the current values of consumer surplus and farm income. Resource constraints used in the experimental model include water, land, capital, labor, and chemical fertilizers, with chemical fertilizer restrictions repeated for each nitrogen, phosphate, and potash fertilizers. Finally, the GAMS software package and CONOPT3 algorithm were used for data analysis. In the biophysical dimension of the model, the climatic measurement of rainfall was studied in the form of climatic scenarios. Accordingly, the rate of evapotranspiration of crops and, consequently, the production and yield of crops in the region due to climate change and fluctuations were estimated and integrated into the PMP model. Each of these relationships is responsible for providing some of the information needed in the experimental research model. Finally, the dynamic endogenous price optimization framework was estimated as a unit pattern, taking into account all the economic and biophysical relationships in question.



The results showed that the change of current climatic conditions in the coming years would significantly affect the region's biophysical and economic indicators. Accordingly, in the most pessimistic forecast, the agricultural sector's harvest from the aquifer in the next 20 years would increase by 44%. Therefore, it is expected that the existing scarcity of water resources in the region, in the event of a pessimistic scenario of simultaneous climate change, would continue with greater intensity in the coming years. On the other hand, the amount of crop production in this plain in the annual average of the research planning period, according to the scenario of normal climate change, would be equal to 902 thousand tons, which, if other scenarios are realized, the amount would be reduced.

Meanwhile, the largest reduction in production will be in the scenario of simultaneous climate change and equal to 190 thousand tons. Decreased production of crops in the region reduces supply and consequently increases the price of crops. In addition, as rainfall decreases and groundwater abstraction increases for irrigation of crops, production costs would increase due to the increase in groundwater pumping depth, doubling the negative consequences of climate change on crop prices. On the one hand, this affects the producers' income and, on the other hand, it fluctuates the welfare of consumers. Comparing the scenarios showed that if climate change and variability occur simultaneously, the most positive effect will occur in the producer surplus, and the most negative effect would occur in the consumer surplus. Assessing the present value of total economic welfare also confirms that in the scenario of simultaneous climate change, the lowest value of this index, which is equal to 636899 billion rials, would be obtained compared to the baseline scenario.



Climate change reduces production and increases food prices by negatively affecting access to groundwater resources and the yield of most crops. These conditions create adverse effects on consumer surpluses and, on the other hand, provide the opportunity for most producers to increase farm incomes. Although part of the consumer welfare loss is improved by promoting producer benefits, it would be impossible to offset this loss fully. Therefore, total economic welfare would change in a declining direction. Given that it is impossible to avoid various forms of climate scenarios, it is necessary to apply adaptation strategies to the phenomenon to mitigate its negative effects on food security in the region. Based on this, it is suggested that at the plant, field, and basin level, measures such as the use of high-yield and drought-resistant seeds, application of deficit irrigation methods, and upgrading irrigation technology to consume water in proportion to the water needs of crops, reduce evaporation and transpiration through the improving planting and plowing dates, increasing water infiltration into groundwater aquifers by improving soil quality, increasing water economic efficiency by optimally selecting crops, and finally, using sewage in agricultural production should be on the agend.

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