# **SUMMARY**

This study uses the Ricardian approach to examine the economic impact of climate change on agriculture in Zimbabwe. The approach regresses net farm revenue against various climate, soil, hydrological and socio-economic variables to help determine the factors that influence variability in net farm revenues. The study was based on data from a survey of 700 smallholder farming households interviewed across the country. The temperature and precipitation data came from the Africa Rainfall and Temperature Evaluation System (ARTES) (World Bank 2003) and soil data were obtained from FAO (2003). Data concerning hydrology were obtained from the University of Colorado (Strzepek & McCluskey 2006).

The empirical results show that climatic variables (temperature and precipitation) have significant effects on net farm revenues in Zimbabwe. In addition to the analysis of all farms, the study also analyzes the effects on rainfed farms and farms with irrigation. Marginal analysis indicates that net farm revenues are affected negatively by increases in temperature and positively by increases in precipitation. The results from sensitivity analysis suggest that agricultural production in Zimbabwe’s smallholder farming system is significantly constrained by climatic factors (high temperature and low rainfall). The elasticity results show that the changes in net revenue are very high for rainfed farming compared to farms with irrigation. The elasticities of summer temperature and precipitation for rainfed farms are -7.26 and 12.16, respectively, compared to -3.79 and 9.81 for irrigated farms. The results show that farms with irrigation are more resistant to changes in climate, indicating that irrigation is an important adaptation option to help reduce the impact of further changes in climate.

The study examined some simple climate scenarios to see how agricultural production in the country would respond to climate change. These ‘uniform’ scenarios assume that only one aspect of climate changes and that change is uniform across the country. The uniform scenarios showed that a 2.5°C increase in temperature would result in a decrease in net farm revenues by US$0.4 billion for all farms and increase net revenue from farms with irrigation by US$0.3 billion. The study also examined the impact of a 5°C increase in temperature and the results showed that net revenues would decrease across all farms, rainfed farms and farms with irrigation by US$0.4 billion, US$0.5 billion and US$0.003 billion respectively. A 7% and a 14% decrease in precipitation would result in a decrease in net farm revenue by US$0.3 billion for all farms.

The study also examined the impacts of three SRES climate change scenarios, namely CGM2, HadCM3 and PCM. These predicted that by 2100 net farm revenues would decrease across all farms by respectively US$0.8 billion, US$1.3 billion and US$1.4 billion. An overview of farmer adaptation to changing climate indicates that farmers are already using some adaptation strategies – such as dry and early planting, growing drought resistant crops, changing planting dates, and using irrigation – to cushion themselves against further anticipated adverse climatic conditions.

An important policy message from the empirical findings is that there is a great need for the government, through the meteorological department, research and extension, the private sector and NGOS, to provide adequate extension information services to ensure that farmers receive up-to-date information about rainfall patterns in the forthcoming season so that they make well-informed decisions on their planting dates. Another is that the government, research and extension, the private sector and NGOs can improve net farm performances for smallholder farms by ensuring increase farmer training and more access to credit and aid facilities and by helping farmers acquire livestock and important farm assets can improve 2