# **1. Introduction**

Climate change impact studies have shown that the productivity of agricultural activities is highly sensitive to climate change. The effect of changes in climate on agricultural activities both physical and economic has been shown to be significant for low input farming systems, such as subsistence farming in developing countries in Sub-Saharan Africa that are located in marginal areas and have the least capacity to adapt to changing climatic conditions (Rosenzweig & Parry 1994; Reilly & Schimmelpfennig 1999; Kates 2000; McGuigan et al. 2002).

Because most developing countries are heavily dependent on agriculture, the effect of climate change on their productive croplands is likely to threaten economic development and the welfare of the population. In addition, developing countries in tropical regions usually have large areas of poor marginal soils that are unusable for agriculture, which makes them particularly vulnerable to potential damage from environmental changes (Mendelsohn & Dinar 1999). The importance of agriculture for the economies of most African countries and the farming sector’s reliance on the quality of rains during the rainy season make Zimbabwe and other countries in the region particularly sensitive to climate change and food insecure (Mendelsohn et al. 2000).

The effect of climate change on agricultural systems can be seen in the interaction between changes in climate variables and the stresses that result from actions taken to increase agricultural production. Impacts on crop yields, agricultural productivity and food security vary depending on the types of agricultural practices and systems (Watson et al. 1997). There is growing evidence that further increases in global warming leading to changes in main climate variables – temperature, precipitation, sea level rise, atmospheric carbon dioxide content and incidence of extreme events – may significantly affect African agricultural production (Watson et al. 1997), with the result that the livelihoods of subsistence farmers and pastoral peoples, who make up a large portion of rural populations in Sub-Saharan Africa, could be negatively affected. For instance, in areas where temperatures are already warm, such as Zimbabwe and most parts of sub-Saharan Africa, further increases in temperature may actually slow down rather than stimulate plant growth, culminating in a general decrease in expected yield for most of the current food crops. The indirect effect of the increased temperatures is the anticipated reduction in effective rainfall even when current amounts of rainfall are sustained, culminating in greater incidence of crop failure.

Empirical agronomic studies in Zimbabwe have revealed that climate change has a negative effect on the agricultural performance of major crops. For instance Muchena (1994) and Magadza (1994) showed that a 2oC rise in ambient temperature and a rise of mean temperature by 4oC significantly lowered yields. In another study, Makadho (1996) assessed the potential effects of climate change on corn, using a Global Circulation Model (GCM) and the dynamic crop growth model CERES-maize, and the results indicated that maize production was expected to significantly decrease by approximately 11–17%, under conditions of both irrigation and non-irrigation. A reduced crop growth period because of increases in temperature, particularly during the grain filling and ripening stages, has been found to be the main factor contributing to decreased yields.

There has been extensive research on the impacts of climate change, but little on the economic impacts on agriculture in Zimbabwe. To fill this empirical gap, this study carries out an economic analysis of the potential impacts of climate change on Zimbabwe’s agricultural sector at the farm level. It also incorporates a brief analysis of adaptation 5