Economic Evaluation of Agricultural Sector in Fars Province as a Result of Climate Change

Nowadays, due to the widespread effects of climate on various sectors of production, environmental factors, and human societies, climate change is recognized as one of the most important environmental challenges of the 21st century with serious economic consequences. According to the available evidence, climate change will occur in different parts of Iran and will inevitably affect the agricultural sector. Fars province is one of the most important agricultural areas in Iran. The occurrence of drought is one of the characteristics of climatic conditions in Fars province, which along with the lack of water resources has created restrictions for the production of agricultural products. Therefore, it is necessary to estimate the economic consequences of agricultural activity due to climate change in this province. This study was conducted under a balanced greenhouse gas emission (B1) scenario according to the IPCC 2013 report and used an endogenous mathematical programming model up to 2100.  

To simulate the effects of a policy or environmental change, it is necessary to compare the the current situation (reference condition) and the post-change situation. For this analysis to be valid, the policy analysis model should simulate the observed values ​​as much as possible in the base year. For this purpose, the positive mathematical programming model (PMP) was used. In this model, the relationship between the economic variables in the agricultural sector with climatic parameters and strategies can be modeled. Therefore, a 28-year historical period from 1987 to 2015 was considered with the year 2009 as the base year of production and import due to the appropriate time interval between the beginning and end of the period and the special conditions of production and import. For this purpose, the environmental agro-zoning prepared by FAO was used. Based on the zoning of the ecological agro-zone, FAO has divided Iran's agricultural regions into 10 different regions. Given that Iran is a developing country with vast energy resources, it can be considered a growth model by pressing on natural resources. According to the climatic conditions proposed by the IPCC, the amount of carbon dioxide emissions is forecast for economic growth in the country. The greenhouse gas emission (SRES-B1) scenario used in this study was based on two global circulation models -- HadCM3 and IPCM4, with the highest population growth occurring in the middle of the century and rapid growth in the sector. According to this scenario, the CO2 concentration will not change much and the temperature will rise between 1.1 and 2.9 ° C.  

According to the results of the study, the area under total crops will decrease by 0.017 percent compared to the base year (2009) to 1.388 million hectares in 2100. According to the results, the area under total crops will decrease by 0.017 percent compared to the base year (2009) to 1.388 million hectares in 2100. Also, the area under cultivation of wheat (1.8%), barley (0.4%), summer crops (1.4%), and legumes (1.2%) will increase. In contrast, the area under cultivation of potato crops (4.9%), onions (5.8%), sugar beet (5.8%), and cotton (3.3%) will decrease. Also wheat, rice, legumes, vegetables, potatoes, onions, tomatoes, sugar, cotton, red meat, milk, chicken, and eggs will have price increase by 28.43%, 25.34%, 12.8%, 24.67%, 27.8%, 25.45%, 22.28%, 23.27%, 19.8%, 39.45%, 18.25%, 23.54%, and 27.45%, respectively. These results show that the increase in the price of group 1 products is much lower than the second group, which according to the results of the study may be due to the further increase in the area under cultivation of group 1 products and changes in consumption of these products. Changes in the area under cultivation and consumption woul affect the export and import of such products with the import of wheat, barley, rice, corn, meat, legumes, and oilseeds declining while exports are slightly increasing. In contrast, sugar and cotton products would show an increase in imports compared to the base year of 2009. Also, according to the findings of this study, under a balanced greenhouse gas emission scenario, by comparing the area under cultivation, consumption will increase. In addition,  with the export of some crops (about 5%), consumer welfare increases by 0.2% (39874 billion rials) and the welfare of producers as a result of higher prices of products and increase in their consumption increase by 0.9% (about 25127.3 rials).  

The results of this study show that the total area under cultivation of crops in Fars province will reach about 1.388 million hectares per year, which compared to the area under cultivation observed in the base year of 2009 shows a decrease of about 0.017 million hectares. It is necessary to mention that according to the statistics of the Ministry of Jihad Agriculture, the area under cultivation of the province's crops in 2019 was 1.3 million hectares, which has decreased by about 0.1 million hectares compared to the base year of 2009. But, according to the results of this study, by 2100, the area under cultivation will reach 1.388 million hectares, which compared to 2019, will increase by 0.088 million hectares. Given the equilibrium scenario used in this study, it is assumed that the amount of greenhouse gas emissions will have a steady trend over the next 8 decades. Therefore, this increase is not unexpected according to this assumption.