The Resilience of Agricultural Systems to Extreme Climate Events: An Analysis Based on Total Factor Productivity

By Wei Zhang, Virginia Tech College of Agriculture and Life Sciences, GAP Initiative Faculty Research Fellow, with Jean Paul Chavas, University of Wisconsin-Madison

Climate change affects many dimensions of agricultural production and could threaten regional and global food security and social stability. (Wheeler & von Braun, 2013) Our research will examine the dynamic relationship between extreme climate events and the resilience of farming systems through the lens of TFP growth. Our ultimate goal is to shed light on the design of government programs and potential private-public partnerships for climate adaptation and agricultural sustainability.

Conventionally, TFP growth is viewed as capturing technological progress. In the context of agricultural systems, technological advancement should be interpreted in a broad sense to include efficiency gains from better management practices. For example, planting cover crops reduce soil erosion and could increase soil organic matter and improve soil structure over time. Strategically timed irrigation is an effective mitigation strategy under reduced-water scenarios for agricultural production. (Grant et al., 2017) These practices can boost agricultural productivity and mitigating some of the negative environmental impacts of agricultural production. Thus, TFP growth, when interpreted broadly, can be viewed as one of the indicators of the sustainability of agricultural systems.

Recent work has emphasized the importance of TFP growth for agricultural sustainability and resilience. (Coomes et al., 2019) The resilience of a system generally refers to the system’s ability (or capacity) to withstand shocks and recover quickly. Sustainability and resilience are concepts used to assess the long-run health of agricultural systems. Resilience is a necessary (but not sufficient) condition for sustainability. The resilience of agricultural systems to extreme weather shocks and subsequent adaptation is crucial for global food production and security. Our research seeks to understand better the role of TFP growth in this complex relationship through the vital link of agricultural resilience to extreme climate events.

We know very little about the dynamic impact of climate change on agriculture, except for crop yield adjustments to growing season temperature and rainfall. (Chavas & Di Falco, 2017) Dynamic effects are long-lasting, representing the impacts of climate change on the adjustment path of agricultural systems. For example, extreme heat lowers seasonal crop yields leads to the adoption of drip irrigation. Both changes affect TFP, but the latter will change agricultural TFP growth in the long run. Our research will investigate the impacts of extreme climate events on the path of agricultural TFP growth.

Looking ahead, this project represents a crucial step in our research agenda to deepen the understanding of the relationship between TFP growth and agricultural sustainability. Evidence indicates that global agricultural TFP growth is slowing down. Though this pattern varies across countries, degradation of natural capital and associated ecosystem services plays a critical role. (Alston et al., 2020) More research is needed to understand the relationship between TFP growth and agricultural sustainability. (Fuglie et al., 2016)

Wei Zhang is an assistant professor of agricultural and applied economics at Virginia Tech, collaborating with Jean Paul Chavas, professor emeritus in agricultural and applied economics at the University of Wisconsin-Madison. The GAP Initiative funds their research, and findings will be published in the 2022 GAP Report.