Economic impacts of climate change on maize production in the sub-humid and semi arid areas of Tanzania

Abstract

Climate change is the cause of most weather related externalities. Its effects are more evident on the environment, food security, human health, human settlements, economic activities, natural resources and physical infrastructure. This study assessed the economic impacts of climate change with a special focus on maize production. It examined the role of socioeconomic and biophysical characteristics in determining maize net revenue, the marginal impact of changes in climate variables and projected climate change impact on net revenue from maize enterprise due to future changes in climate in the sub-humid and semi-arid areas of Tanzania. The study utilized cross-sectional household data collected by the National Bureau of Statistics under its National Panel Survey in 2011/2012 from which 323 households were randomly sampled. Both descriptive and econometric methods were used to analyze the data. The Ricardian model was employed to assess the impact of climate change on maize production and in the model net revenue per hectare was regressed against a set of climate variables, socio-economic and biophysical variables using a two stage least square estimation method so as to address the problem of correlation between the dependent variable error term and the independent variables for the sub humid and semi-arid areas and across all farms. Results from the analysisindicated that household size and education of the household headpositivelyimpacted net farm return from maize production. Also it revealed that temperature and rainfall (p < 0.01) will negatively impact net revenue. Basing on the CMIP5 for Tanzania using the Mid-Century Representative Concentration Pathway (RCP) 8.5 the predicted future climate change will adversely impact net revenue from maize production in the sub-humid and semi-arid areas of Tanzania by the year 2050. Therefore investing in new technologies and adequate extension information services are recommended from this study so as to increase farmers‟ adaptive capacity to reduce the impact of climate change on maize production.